ECONOMICS

Economics

[Name of the Institute]

Introduction

This paper will present an overview of the Bretton woods experience. From the perspective of history the performance relative to the international monetary regime along with its origins and its operation will also be discussed in the following paper.This paper will focus on the key elements of international monetary regimes such as exchange rates, the policies of handling international payment balances and adjustments, international credit and the monetary policy. There other part of the paper will briefly discusses what Keynes wanted for such international monetary regimes.

Discussion

The Bretton Woods system of monetary management established the rules for the financial and commercial relation among the major industrial states of the world in the mid of 20th century. The Bretton Woods system was the first example of the fully negotiated monetary order that were intended for governing the monetary relation among the independent nation states. Preparing for rebuilding the international economic system while the World War II was still ranging the 730 delegates from the all the 44 Allied nations that were gathered at the Mount Washington Hotel in the Bretton Woods, United States, New Hampshire, for the United Nations Monetary and the Financial conference which is also called as the Bretton Woods Conference. The delegates deliberated during the 1 - 22 July 1994 and also it has signed the Agreement on its last day (Dooley, 2009).

In order to set up the system of institutions, rules and procedure for regulating the international monetary system, the planners at the Bretton Woods founded the international bank for Reconstruction and Development and the International monetary Fund which currently is the part of the World Bank Group. In the year 1945 these organization became operational after having the sufficient number of the countries that has ratified the agreement (Hausman, 2013).

The key features of the Bretton Woods system were an compulsion for every country to adopt the monetary policy that has been maintained the exchange rate by typing its currency to the US dollars and the capability and the and ability of the International Monetary Funds to bridge the temporary imbalances of the payments.

On August 15th 1971, the United States of America independently terminated the convertibly of the US gold because of which the Bretton system was ended and also saw the dollar to become the fiat currency. This action was called as the Nixon Shock, that has established a situation in which the dollar of United states of America became reserve currency for several states. At the same time the fixed currencies for instance the GBP has became free floating also (Bordo, 2012).

Ccountries endeavored to resuscitate the highest level accompanying World War I, however it given way quite throughout the Great Depression of the 1930s. A few economists said adherence to the highest level had averted financial powers from stretching the cash supply quickly enough to restore budgetary action. In any occasion, delegates of the majority of the planet's heading countries met at Bretton Woods, New Hampshire, in 1944 to make another worldwide ...