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The bretton woods system presentation


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Bretton Woods

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The bretton woods system presentation

  2. 2. Introduction Harry Dexter White John Maynard Keynes
  3. 3. Events leading up to the conference • Restrictive market practices which caused the devaluation, deflation and depression that defined the economy of the 1930s. • World War II • The gold standard
  4. 4. • Intended to govern currency regulations and establish legal obligations (through the IMF) • Set a standard for exchange rates • Establish international monetary cooperation • Money pool from which member nations can borrow funds Goals of the Conference
  5. 5. Outcome (formally established December 27, 1945) • “Adjustable peg” currency • Quotas embedded in the IMF • Members were forbidden to engage in discriminatory currency practices • The creation of the IMF and World Bank • The dollar standard
  6. 6. • Post-war monetary relations were unstable • The member nations underestimated the strength of their funds... after two years of lending, the IMF was drained of its money Problems
  7. 7. The Implied Bargain The U.S. becomes a global hegemon due to strength of the dollar US's allies acquiesce to this hegemonic system because it benefits their own economies U.S. allows allies’ use of the system for their own benefit U.S. is able to act unilaterally to secure its own interests
  8. 8. The End of the Bretton Woods System • Due to the costs of the Vietnam War and nations trading dollars for gold. • The link between gold and the dollar is severed. • Flexible exchange rates allow for countries to adjust to increased prices. • The formation of the European Monetary System.
  9. 9. The World Bank and IMF are still active, although they have been severely criticized for some of their policies
  10. 10. THANK YOU