Bretton Woods system

1264:. The United States was running large balance of trade surpluses, and U.S. reserves were immense and growing. It was necessary to reverse this flow. Even though all nations wanted to buy U.S. exports, dollars had to leave the United States and become available for international use so they could do so. In other words, the United States would have to reverse the imbalances in global wealth by running a balance of trade deficit, financed by an outflow of U.S. reserves to other nations (a U.S. financial account deficit). The U.S. could run a financial deficit by either importing from, building plants in, or donating to foreign nations. Speculative investment was discouraged by the Bretton Woods agreement, and importing from other nations was not appealing in the 1950s, because U.S. technology was cutting edge at the time. So, multinational corporations and global aid that originated from the U.S. burgeoned. 294:. If Britain imported more than it exported to such nations, recipients of pounds sterling within these nations tended to put them into London banks. This meant that though Britain was running a trade deficit, it had a financial account surplus, and payments balanced. Increasingly, Britain's positive balance of payments required keeping the wealth of Empire nations in British banks. One incentive for, say, South African holders of rand to park their wealth in London and to keep the money in Sterling, was a strongly valued pound sterling. In the 1920s, imports from the US threatened certain parts of the British domestic market for manufactured goods and the way out of the trade deficit was to devalue the currency. But Britain could not devalue, or the Empire surplus would leave its banking system. 6652: 223:. After World War I, Britain owed the U.S. substantial sums, which Britain could not repay because it had used the funds to support allies such as France during the War; the Allies could not pay back Britain, so Britain could not pay back the U.S. The solution at Versailles for the French, British, and Americans seemed to entail ultimately charging Germany for the debts. If the demands on Germany were unrealistic, then it was unrealistic for France to pay back Britain, and for Britain to pay back the US. Thus, many "assets" on bank balance sheets internationally were actually unrecoverable loans, which culminated in the 362:"scramble for gold". Sterilization of gold inflows by surplus countries , substitution of gold for foreign exchange reserves, and runs on commercial banks all led to increases in the gold backing of money, and consequently to sharp unintended declines in national money supplies. Monetary contractions in turn were strongly associated with falling prices, output and employment. Effective international cooperation could in principle have permitted a worldwide monetary expansion despite gold standard constraints, but disputes over World War I reparations and war debts, and the insularity and inexperience of the 1413:

than full convertibility, the system provided a fixed price for sales between central banks. However, there was still an open gold market. For the Bretton Woods system to remain workable, it would either have to alter the peg of the dollar to gold, or it would have to maintain the free market price for gold near the $ 35 per ounce official price. The greater the gap between free market gold prices and central bank gold prices, the greater the temptation to deal with internal economic issues by buying gold at the Bretton Woods price and selling it on the open market.

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Federal Reserve lowered interest rates in pursuit of a previously established domestic policy objective of full national employment. With the Smithsonian Agreement, member countries anticipated a return flow of dollars to the U.S, but the reduced interest rates within the United States caused dollars to continue to flow out of the U.S. and into foreign central banks. The inflow of dollars into foreign banks continued the monetization of the dollar overseas, defeating the aims of the Smithsonian Agreement. As a result, the dollar price in the gold

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be seen as political risks for leaders. As a result, official exchange rates often became unrealistic in market terms, providing a virtually risk-free temptation for speculators. They could move from a weak to a strong currency hoping to reap profits when a revaluation occurred. If, however, monetary authorities managed to avoid revaluation, they could return to other currencies with no loss. The combination of risk-free speculation with the availability of large sums was highly destabilizing.

827: 2998: 1625: 618: 436: 22: 1033: 1126:" that reflect their relative economic power—and, as a sort of credit deposit, are obliged to pay a "subscription" of an amount commensurate with the quota. They pay the subscription as 25% in gold or currency convertible into gold (effectively the dollar, which at the founding, was the only currency then still directly gold convertible for central banks) and 75% in their own currency. 1052:

price stability within the world's economies, while Keynes wanted a system that encouraged economic growth. The "collective agreement was an enormous international undertaking" that took two years prior to the conference to prepare for. It consisted of numerous bilateral and multilateral meetings to reach common ground on what policies would make up the Bretton Woods system.

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currencies and gold… that would effectively limit the supply of reserve credit". Keynes wanted incentives for the U.S. to help Britain and the rest of Europe rebuild after WWII. Outlining the difficulty of creating a system that every nation could accept in his speech at the closing plenary session of the Bretton Woods conference on 22 July 1944, Keynes stated:

366:, among other factors, prevented this outcome. As a result, individual countries were able to escape the deflationary vortex only by unilaterally abandoning the gold standard and re-establishing domestic monetary stability, a process that dragged on in a halting and uncoordinated manner until France and the other Gold Bloc countries finally left gold in 1936. — 1763:, unilaterally imposing 90-day wage and price controls, a 10% import surcharge, and most importantly "closed the gold window", making the dollar inconvertible to gold directly, except on the open market. Unusually, this decision was made without consulting members of the international monetary system or even his own State Department and was soon dubbed the 1561:. In an increasingly interdependent world, U.S. policy significantly influenced economic conditions in Europe and Japan. In addition, as long as other countries were willing to hold dollars, the U.S. could carry out massive foreign expenditures for political purposes—military activities and foreign aid—without the threat of balance-of-payments constraints. 5408: 1361:

not sustain foreign deployments, the U.S. had the power to decide why, when and how to intervene in global crises. The dollar continued to function as a compass to guide the health of the world economy and exporting to the U.S. became the primary economic goal of developing or redeveloping economies. This arrangement came to be referred to as the

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to purchase its own products. The U.S. was concerned that a sudden drop-off in war spending might return the nation to unemployment levels of the 1930s, and so wanted Sterling nations and everyone in Europe to be able to import from the US, hence the U.S. supported free trade and international convertibility of currencies into gold or dollars.

1702:(SDRs) were set as equal to one U.S. dollar but were not usable for transactions other than between banks and the IMF. Nations were required to accept holding SDRs equal to three times their allotment, and interest would be charged, or credited, to each nation based on their SDR holding. The original interest rate was 1.5%. 319:, rejected Keynes' proposals, in favor of an International Monetary Fund with enough resources to counteract destabilizing flows of speculative finance. However, unlike the modern IMF, White's proposed fund would have counteracted dangerous speculative flows automatically, with no political strings attached—i.e., no IMF 938:" currency regime. Members were required to establish a parity of their national currencies in terms of the reserve currency (a "peg") and to maintain exchange rates within plus or minus 1% of parity (a "band") by intervening in their foreign exchange markets (that is, buying or selling foreign money). 1870:

In March 2010, Prime Minister Papandreou of Greece wrote an op-ed in the International Herald Tribune, in which he said, "Democratic governments worldwide must establish a new global financial architecture, as bold in its own way as Bretton Woods, as bold as the creation of the European Community and

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Despite the economic cost implied by such a policy, being at the center of the international market gave the U.S. unprecedented freedom of action in pursuing its foreign affairs goals. A trade surplus made it easier to keep armies abroad and to invest outside the U.S., and because other nations could

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Economists and other planners recognized in 1944 that the new system could only commence after a return to normality following the disruption of World War II. It was expected that after a brief transition period of no more than five years, the international economy would recover, and the system would

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Never before had international monetary cooperation been attempted on a permanent institutional basis. Even more groundbreaking was the decision to allocate voting rights among governments, not on a one-state one-vote basis, but rather in proportion to quotas. Since the United States was contributing

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Nazi Germany also worked with a bloc of controlled nations by 1940. Germany forced trading partners with a surplus to spend that surplus importing products from Germany. Thus, Britain survived by keeping Sterling nation surpluses in its banking system, and Germany survived by forcing trading partners

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and the yen were undervalued; and, naturally, the Germans and the Japanese had no desire to revalue and thereby make their exports more expensive, whereas the U.S. sought to maintain its international credibility by avoiding devaluation. Meanwhile, the pressure on government reserves was intensified

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between the U.S. and the Soviet Union. The Soviet military threat had been an important force in cementing the U.S.-led monetary system. The U.S. political and security umbrella helped make American economic domination palatable for Europe and Japan, which had been economically exhausted by the war.

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These new forms of monetary interdependence made large capital flows possible. During the Bretton Woods era, countries were reluctant to alter exchange rates formally even in cases of structural disequilibria. Because such changes had a direct impact on certain domestic economic groups, they came to

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repealed the 25% requirement of gold backing of the dollar—as well as the U.S. pledge to suspend gold sales to governments that trade in the private markets, led to the expansion of the private markets for international gold trade, in which the price of gold rose much higher than the official dollar

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countries were scrapped. Aid to Europe and Japan was designed to rebuild productivity and export capacity. In the long run it was expected that such European and Japanese recovery would benefit the United States by widening markets for U.S. exports and providing locations for U.S. capital expansion.

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The modest credit facilities of the IMF were clearly insufficient to deal with Western Europe's huge balance of payments deficits. The problem was further aggravated by the reaffirmation by the IMF Board of Governors of the provision in the Bretton Woods Articles of Agreement that the IMF could make

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Although a compromise was reached on some points, because of the overwhelming economic and military power of the United States the participants at Bretton Woods largely agreed on White's plan. White’s plan was designed not merely to secure the rise and world economic domination of the United States,

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debtors and creditors should change their policies. As outlined by Keynes, countries with payment surpluses should increase their imports from the deficit countries, build factories in debtor nations, or donate to them—and thereby create a foreign trade equilibrium. Thus, Keynes was sensitive to the

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The only currency strong enough to meet the rising demands for international currency transactions was the U.S. dollar. The strength of the U.S. economy, the fixed relationship of the dollar to gold ($ 35 an ounce), and the commitment of the U.S. government to convert dollars into gold at that price

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The architects of Bretton Woods had conceived of a system wherein exchange rate stability was a prime goal. Yet, in an era of more activist economic policy, governments did not seriously consider permanently fixed rates on the model of the classical gold standard of the 19th century. Gold production

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One of the reasons Bretton Woods worked was that the U.S. was clearly the most powerful country at the table and so ultimately was able to impose its will on the others, including an often-dismayed Britain. At the time, one senior official at the Bank of England described the deal reached at Bretton

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described the spirit of Bretton Woods as: if we can "stop subsidization of labor and sweated competition in the export markets", as well as prevent rebuilding of war machines, "oh boy, oh boy, what long term prosperity we will have." The United States could therefore use its position of influence to

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had only grudgingly accepted government-imposed restraints on their demands during the war, but they were willing to wait no longer, particularly as inflation cut into the existing wage scales with painful force (by the end of 1945, there had already been major strikes in the automobile, electrical,

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and foster the reduction of barriers to trade and capital flows. In a sense, the new international monetary system was a return to a system similar to the pre-war gold standard, only using U.S. dollars as the world's new reserve currency until international trade reallocated the world's gold supply.

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Another aspect of the internationalization of banking has been the emergence of international banking consortia. Since 1964 various banks had formed international syndicates, and by 1971 over three-quarters of the world's largest banks had become shareholders in such syndicates. Multinational banks

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named White as its first U.S. Executive Director. Since no Deputy Managing Director post had yet been created, White served occasionally as Acting Managing Director and generally played a highly influential role during the IMF's first year. Truman had to abandon his original plan of naming White as

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to cut its national income down to such a low level that its imports would finally fall within its means. Thus, countries were to be spared the need to resort to the classical medicine of deflating themselves into drastic unemployment when faced with chronic balance of payments deficits. Before the

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Officially established on 27 December 1945, when the 29 participating countries at the conference of Bretton Woods signed its Articles of Agreement, the IMF was to be the keeper of the rules and the main instrument of public international management. The Fund commenced its financial operations on 1

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emphasized "the importance of rule-based regimes to stabilize business expectations"—something he accepted in the Bretton Woods system of fixed exchange rates. Currency troubles in the interwar years, it was felt, had been greatly exacerbated by the absence of any established procedure or machinery

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Meanwhile, to bolster confidence in the dollar, the U.S. agreed separately to link the dollar to gold at the rate of $ 35 per ounce. At this rate, foreign governments and central banks could exchange dollars for gold. Bretton Woods established a system of payments based on the dollar, which defined

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As the war drew to a close, the Bretton Woods conference was the culmination of some two and a half years of planning for postwar reconstruction by the Treasuries of the U.S. and the UK. U.S. representatives studied with their British counterparts the reconstitution of what had been lacking between

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However, increased government intervention in domestic economy brought with it isolationist sentiment that had a profoundly negative effect on international economics. The priority of national goals, independent national action in the interwar period, and the failure to perceive that those national

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Facing the Soviet Union, whose power had also strengthened and whose territorial influence had expanded, the U.S. assumed the role of leader of the capitalist camp. The rise of the postwar U.S. as the world's leading industrial, monetary, and military power was rooted in the fact that the mainland

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embedded in the IMF, which itself was to be no more than a fixed pool of national currencies and gold subscribed by each country, as opposed to a world central bank capable of creating money. The Fund was charged with managing various nations' trade deficits so that they would not produce currency

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A major point of common ground at the Conference was the goal to avoid a recurrence of the closed markets and economic warfare that had characterized the 1930s. Thus, negotiators at Bretton Woods also agreed that there was a need for an institutional forum for international cooperation on monetary

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and it was the only currency that was backed by gold. Additionally, all European nations that had been involved in World War II were highly in debt and transferred large amounts of gold into the United States, a fact that contributed to the supremacy of the United States. Thus, the U.S. dollar was

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that was never implemented), proposed by John Maynard Keynes; however, the United States objected, and their request was granted, making the "reserve currency" the U.S. dollar. This meant that other countries would peg their currencies to the U.S. dollar, and—once convertibility was restored—would

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To ensure economic stability and political peace, states agreed to cooperate to closely regulate the production of their currencies to maintain fixed exchange rates between countries with the aim of more easily facilitating international trade. This was the foundation of the U.S. vision of postwar

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nhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war … if we could get a freer flow of trade…freer in the sense of fewer discriminations and obstructions…so that one country would not be deadly jealous of another and the living standards of

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When many of the same experts who observed the 1930s became the architects of a new, unified, post-war system at Bretton Woods, their guiding principles became "no more beggar thy neighbor" and "control flows of speculative financial capital". Preventing a repetition of this process of competitive

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The agreement failed to encourage discipline by the Federal Reserve or the United States government. The Federal Reserve was concerned about an increase in the domestic unemployment rate due to the devaluation of the dollar. In an attempt to undermine the efforts of the Smithsonian Agreement, the

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was predicted when Triffin noted that if the U.S. failed to keep running deficits the system would lose its liquidity, not be able to keep up with the world's economic growth, and, thus, bring the system to a halt. But incurring such payment deficits also meant that, over time, the deficits would

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The design of the Bretton Woods System was such that nations could only enforce convertibility to gold for the anchor currency—the United States dollar. Conversion of dollars to gold was allowed but was not required. Nations could forgo converting dollars to gold, and instead hold dollars. Rather

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The IMF sought to provide for occasional discontinuous exchange-rate adjustments (changing a member's par value) by international agreement. Member nations were permitted to adjust their currency exchange rate by 1%. This tended to restore equilibrium in their trade by expanding their exports and

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As the chief international economist at the U.S. Treasury in 1942–44, Harry Dexter White drafted the U.S. blueprint for international access to liquidity, which competed with the plan drafted for the British Treasury by Keynes. Overall, White's scheme tended to favor incentives designed to create

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representatives attended the conference but later declined to ratify the final agreements, charging that the institutions they had created were "branches of Wall Street". These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement. According to

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were possible to meet at first. Throughout the 1950s Washington sustained a balance of payments deficit to finance loans, aid, and troops for allied regimes. But during the 1960s the costs of doing so became less tolerable. By 1970 the U.S. held under 16% of international reserves. Adjustment to

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Thus, the new system would be devoid (initially) of governments meddling with their currency supply as they had during the years of economic turmoil preceding WWII. Instead, governments would closely police the production of their currencies and ensure that they would not artificially manipulate

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agreed not to purchase gold from the U.S., and agreed to hold dollars instead, the pressure on both the dollar and the pound sterling continued. In January 1968 Johnson imposed a series of measures designed to end gold outflow, and to increase U.S. exports. This was unsuccessful, however, as in

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Yet U.S. officials were determined to open their access to the British empire. The combined value of British and U.S. trade was well over half of all the world's trade in goods. For the U.S. to open global markets, it first had to split the British (trade) empire. While Britain had economically

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By 1968, the attempt to defend the dollar at a fixed peg of $ 35/ounce, the policy of the Eisenhower, Kennedy and Johnson administrations, had become increasingly untenable. Gold outflows from the U.S. accelerated, and despite gaining assurances from Germany and other nations to hold gold, the

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The shift toward a more pluralistic distribution of economic power led to increasing dissatisfaction with the privileged role of the U.S. dollar as the international currency. Acting effectively as the world's central banker, the U.S., through its deficit, determined the level of international

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Quota subscriptions form the largest source of money at the IMF's disposal. The IMF set out to use this money to grant loans to member countries with financial difficulties. Each member is then entitled to withdraw 25% of its quota immediately in case of payment problems. If this sum should be

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was used to back currencies; the international value of currency was determined by its fixed relationship to gold; gold was used to settle international accounts. The gold standard maintained fixed exchange rates that were seen as desirable because they reduced the risk when trading with other

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and investment outright. Global central bankers attempted to manage the situation by meeting with each other, but their understanding of the situation as well as difficulties in communicating internationally, hindered their abilities. The lesson was that simply having responsible, hard-working

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insisted that the Big Four (United States, United Kingdom, the Soviet Union, and China) participate in the Bretton Woods conference in 1944, but their plans were frustrated when the Soviet Union would not join the IMF. The reasons why the Soviet Union chose not to subscribe to the articles by

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boom, monetary policy in several major countries turned contractionary in the late 1920s—a contraction that was transmitted worldwide by the gold standard. What was initially a mild deflationary process began to snowball when the banking and currency crises of 1931 instigated an international

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After the end of World War II, the U.S. held $ 26 billion in gold reserves, of an estimated total of $ 40 billion (approx 65%). As world trade increased rapidly through the 1950s, the size of the gold base increased by only a few percentage points. In 1950, the U.S. balance of payments swung

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of $ 10 billion and was expected to make loans of its own funds to underwrite private loans and to issue securities to raise new funds to make possible a speedy postwar recovery. The IBRD was to be a specialized agency of the United Nations, charged with making loans for economic development

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Although attended by 44 nations, discussions at the conference were dominated by two rival plans developed by the United States and Britain. Writing to the British Treasury, Keynes, who took the lead at the Conference, did not want many countries. He believed that those from the colonies and

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A devastated Britain had little choice. Two world wars had destroyed the country's principal industries that paid for the importation of half of the nation's food and nearly all its raw materials except coal. The British had no choice but to ask for aid. Not until the United States signed an

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with tight controls on the values of currencies. Flows of speculative international finance were curtailed by shunting them through and limiting them via central banks. This meant that international flows of investment went into foreign direct investment (FDI)—i.e., construction of factories

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was faced with a difficult choice, either institute protectionist measures, including travel taxes, export subsidies and slashing the budget—or accept the risk of a "run on gold" and the dollar. From Johnson's perspective: "The world supply of gold is insufficient to make the present system

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At the time, gaps between the White and Keynes plans seemed enormous. White basically wanted a fund to reverse destabilizing flows of financial capital automatically. White proposed a new monetary institution called the Stabilization Fund that "would be funded with a finite pool of national

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The breakdown of the business structure of Europe during the war was complete. … Europe's requirements for the next three or four years of foreign food and other essential products … principally from the United States … are so much greater than her present ability to pay that she must have

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and Japan had become international economic powers in their own right. With total reserves exceeding those of the U.S., higher levels of growth and trade, and per capita income approaching that of the U.S., Europe and Japan were narrowing the gap between themselves and the United States.

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programs through taxation resulted in an increased dollar outflow to pay for the military expenditures and rampant inflation, which led to the deterioration of the U.S. balance of trade position. In the late 1960s, the dollar was overvalued with its current trading position, while the

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banking market, the IBRD was forced to adopt a conservative lending policy, granting loans only when repayment was assured. Given these problems, by 1947 the IMF and the IBRD themselves were admitting that they could not deal with the international monetary system's economic problems.

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The IMF was designed to advance credits to countries with balance of payments deficits. Short-run balance of payment difficulties would be overcome by IMF loans, which would facilitate stable currency exchange rates. This flexibility meant a member state would not have to induce a

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But the United States, as a likely creditor nation, and eager to take on the role of the world's economic powerhouse, used White's plan but targeted many of Keynes's concerns. White saw a role for global intervention in an imbalance only when it was caused by currency speculation.

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Members were required to pay back debts within a period of 18 months to five years. In turn, the IMF embarked on setting up rules and procedures to keep a country from going too deeply into debt year after year. The Fund would exercise "surveillance" over other economies for the

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In 1971 more and more dollars were being printed in Washington, then being pumped overseas, to pay for government expenditure on the military and social programs. In the first six months of 1971, assets for $ 22 billion fled the U.S. In response, on 15 August 1971, Nixon issued

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From 1947 until 1958, the U.S. deliberately encouraged an outflow of dollars, and, from 1950 on, the United States ran a balance of payments deficit with the intent of providing liquidity for the international economy. Dollars flowed out through various U.S. aid programs: the

977:". The formal definition of fundamental disequilibrium was never determined, leading to uncertainty of approvals and attempts to repeatedly devalue by less than 10% instead. Any country that changed without approval or after being denied approval was denied access to the IMF. 315:, was behind Britain's proposal that surplus nations be forced by a "use-it-or-lose-it" mechanism, to either import from debtor nations, build factories in debtor nations or donate to debtor nations. The U.S. opposed Keynes' plan, and a senior official at the U.S. Treasury, 1705:

The intent of the SDR system was to prevent nations from buying pegged gold and selling it at the higher free market price and give nations a reason to hold dollars by crediting interest, at the same time setting a clear limit to the amount of dollars that could be held.

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In turn, the role of government in the national economy had become associated with the assumption by the state of the responsibility for assuring its citizens of a degree of economic well-being. The system of economic protection for at-risk citizens sometimes called the

1280:) to provide large-scale financial and economic aid for rebuilding Europe largely through grants rather than loans. Countries belonging to the Soviet bloc, e.g., Poland were invited to receive the grants, but were given a favorable agreement with the Soviet Union's 1268:

loans only for current account deficits and not for capital and reconstruction purposes. Only the United States contribution of $ 570 million was actually available for IBRD lending. In addition, because the only available market for IBRD bonds was the conservative

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In the 1960s and 1970s, important structural changes eventually led to the breakdown of international monetary management. One change was the development of a high level of monetary interdependence. The stage was set for monetary interdependence by the return to

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the most, U.S. leadership was the key. Under the system of weighted voting, the United States exerted a preponderant influence on the IMF. The United States held one-third of all IMF quotas at the outset, enough on its own to veto all changes to the IMF Charter.

802:. Based on the dominant British economy, the pound became a reserve, transaction, and intervention currency. But the pound was not up to the challenge of serving as the primary world currency, given the weakness of the British economy after the Second World War. 1320:

regimes, which were struggling to suppress communist revolution, aid to various pro-U.S. regimes in the Third World, and most importantly, the Marshall Plan. From 1948 to 1954 the United States provided 16 Western European countries with $ 17 billion in grants.

4663: 1222:, it expected that there would be national solutions, for example, an adjustment in the value of the currency or an improvement by other means of a country's competitive position. The IMF was left with few means, however, to encourage such national solutions. 707:. During the 1930s, the British created their own economic bloc to shut out U.S. goods. Churchill did not believe that he could surrender that protection after the war, so he watered down the Atlantic Charter's "free access" clause before agreeing to it. 748:

required an accepted vehicle for investment, trade, and payments. Unlike national economies, however, the international economy lacks a central government that can issue currency and manage its use. In the past this problem had been solved through the

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To promote growth of world trade and finance postwar reconstruction of Europe, the planners at Bretton Woods created another institution, the International Bank for Reconstruction and Development (IBRD), which is one of five agencies that make up the

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in various European countries and the US. In the 1930s, world markets never broke through the barriers and restrictions on international trade and investment volume – barriers haphazardly constructed, nationally motivated and imposed. The various

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European Monetary Union. And we need it fast." In interviews coinciding with his meeting with President Obama, he indicated that Obama would raise the issue of new regulations for the international financial markets at the next G20 meetings in

564:, competitive devaluations that contributed to the breakdown of the gold-based international monetary system, domestic political instability, and international war. The lesson learned was, as the principal architect of the Bretton Woods system 1001:

As a result of the establishment of agreed upon structures and rules of international economic interaction, conflict over economic issues was minimized, and the significance of the economic aspect of international relations seemed to recede.

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We, the delegates of this Conference, Mr President, have been trying to accomplish something very difficult to accomplish. It has been our task to find a common measure, a common standard, a common rule acceptable to each and not irksome to

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at the request of the U.S. government. This was followed by a full closure of the London gold market, also at the request of the U.S. government, until a series of meetings were held that attempted to rescue or reform the existing system.

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placed import quotas on oil and other restrictions on trade outflows. More drastic measures were proposed, but not acted upon. However, with a mounting recession that began in 1958, this response alone was not sustainable. In 1960, with

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would reduce imports and the lowering of prices would boost exports; thus, the deficit would be rectified. Any country experiencing inflation would lose gold and therefore would have a decrease in the amount of money available to spend.

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March 1947. IMF approval was necessary for any change in exchange rates in excess of 10%. It advised countries on policies affecting the monetary system and lent reserve currencies to nations that had incurred balance of payment debts.

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In 1944 at Bretton Woods, as a result of the collective conventional wisdom of the time, representatives from all the leading allied nations collectively favored a regulated system of fixed exchange rates, indirectly disciplined by a

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of currencies. Negotiators at the Bretton Woods conference, fresh from what they perceived as a disastrous experience with floating rates in the 1930s, concluded that major monetary fluctuations could stall the free flow of trade.

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contracting imports. This would be allowed only if there was a fundamental disequilibrium. A decrease in the value of a country's money was called a devaluation, while an increase in the value of the country's money was called a

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the two world wars: a system of international payments that would let nations trade without fear of sudden currency depreciation or wild exchange rate fluctuations—ailments that had nearly paralyzed world capitalism during the

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Comments by U.S. Secretary of State George Marshall in his June 1947 speech "Against Hunger, Poverty, Desperation and Chaos" at a Harvard University commencement ceremony. A full transcript of his speech can be read online at

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Reinforcing the relative decline in U.S. power and the dissatisfaction of Europe and Japan with the system was the continuing decline of the dollar—the foundation that had underpinned the post-1945 global trading system. The

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all currencies in relation to the dollar, itself convertible into gold, and above all, "as good as gold" for trade. U.S. currency was now effectively the world currency, the standard to which every other currency was pegged.

931:(IBRD), provided for a system of fixed exchange rates. The rules further sought to encourage an open system by committing members to the convertibility of their respective currencies into other currencies and to free trade. 242:

policies that emerged as the crisis continued saw some trading nations using currency devaluations in an attempt to increase their competitiveness (i.e. raise exports and lower imports), though recent research suggests this

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As gross domestic production grew in European countries, trade grew. When common security tensions lessened, this loosened the transatlantic dependence on defence concerns, and allowed latent economic tensions to surface.

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submitted a report to the president, asserting that White was "a valuable adjunct to an underground Soviet espionage organization", who was placing individuals of high regard to Soviet intelligence inside the government.

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The Bretton Woods arrangements were largely adhered to and ratified by the participating governments. It was expected that national monetary reserves, supplemented with necessary IMF credits, would finance any temporary

384:

overseas, rather than international currency manipulation or bond markets. Although the national experts disagreed to some degree on the specific implementation of this system, all agreed on the need for tight controls.

5805: 1444:, and other less significant events, to as high as $ 40/ounce. The Kennedy administration drafted a radical change of the tax system to spur more production capacity and thus encourage exports. This culminated with the 3143: 1484:

All attempts to maintain the peg collapsed in November 1968, and a new policy program attempted to convert the Bretton Woods system into an enforcement mechanism of floating the gold peg, which would be set by either

1512:

of the Western European currencies at the end of 1958 and of the Japanese yen in 1964. Convertibility facilitated the vast expansion of international financial transactions, which deepened monetary interdependence.

1791:

The August shock was followed by efforts under U.S. leadership to reform the international monetary system. Throughout the fall (autumn) of 1971, a series of multilateral and bilateral negotiations between the

1181:

It was envisioned that these changes in exchange rates would be quite rare. However, the concept of fundamental disequilibrium, though key to the operation of the par value system, was never defined in detail.

1547:

A second structural change that undermined monetary management was the decline of U.S. hegemony. The U.S. was no longer the dominant economic power it had been for more than two decades. By the mid-1960s, the

575:

the absence of a high degree of economic collaboration among the leading nations will … inevitably result in economic warfare that will be but the prelude and instigator of military warfare on an even vaster

1121:

The IMF is provided with a fund composed of contributions from member countries in gold and their own currencies. The original quotas were to total $ 8.8 billion. When joining the IMF, members are assigned

1153:

IMF loans were not comparable to loans issued by a conventional credit institution. Instead, they were effectively a chance to purchase a foreign currency with gold or the member's national currency.

5810: 1440:

in London, could be controlled by having a pool of gold to sell on the open market, that would then be recovered when the price of gold dropped. Gold's price spiked in response to events such as the

679:

Without a strong European market for U.S. goods and services, most policymakers believed, the U.S. economy would be unable to sustain the prosperity it had achieved during the war. In addition, U.S.

1194:

In addition, the IMF was based in Washington, D.C., and staffed mainly by U.S. economists. It regularly exchanged personnel with the U.S. Treasury. When the IMF began operations in 1946, President

4446: 1601:

In contrast, upon the creation of Bretton Woods, with the U.S. producing half of the world's manufactured goods and holding half its reserves, the twin burdens of international management and the

660:

The Atlantic Charter affirmed the right of all nations to equal access to trade and raw materials. Moreover, the charter called for freedom of the seas (a principal U.S. foreign policy aim since

307:

devaluations was desired, but in a way that would not force debtor nations to contract their industrial bases by keeping interest rates at a level high enough to attract foreign bank deposits.

700:

United States allies—economically exhausted by the war—needed U.S. assistance to rebuild their domestic production and to finance their international trade; indeed, they needed it to survive.

7029: 5780: 536:, public management of the economy had emerged as a primary activity of governments in the developed states. Employment, stability, and growth were now important subjects of public policy. 6939: 5830: 5790: 950:

buy and sell U.S. dollars to keep market exchange rates within plus or minus 1% of parity. Thus, the U.S. dollar took over the role that gold had played under the gold standard in the

108:. The delegates deliberated from 1 to 22 July 1944, and signed the Bretton Woods agreement on its final day. Setting up a system of rules, institutions, and procedures to regulate the 6988: 5433: 3192:

Edward S. Mason and Robert E. Asher, "The World Bank Since Bretton Woods: The Origins, Policies, Operations and Impact of the International Bank for Reconstruction". (Washington, DC:

1156:

The U.S.-backed IMF plan sought to end restrictions on the transfer of goods and services from one country to another, eliminate currency blocs, and lift currency exchange controls.

6089: 5095: 5371: 5487: 5075: 1890:

stated that boosting employment and equity "must be placed at the heart" of the IMF's policy agenda. The World Bank indicated a switch towards greater emphases on job creation.

1489:

policy or by a restriction to honor foreign accounts. The collapse of the gold pool and the refusal of the pool members to trade gold with private entities—on 18 March 1968 the

353:... he proximate cause of the world depression was a structurally flawed and poorly managed international gold standard. ... For a variety of reasons, including a desire of the 57:

monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into

4692: 7012: 6945: 6905: 5825: 728:

agreement on 6 December 1945 to grant Britain aid of $ 4.4 billion did the British Parliament ratify the Bretton Woods Agreements (which occurred later in December 1945).

4586: 4040:"The Bretton Woods Debates: A Memoir, Essays in International Finance 192 (Princeton: International Finance Section, Department of Economics, Princeton University, 1994)" 2354:

Note: Converted to euro on 1 January 1999 at €1 = FRF 6.55957. Values prior to the currency reform of 1 January 1960 are shown in new francs or FRF worth 100 old francs.

806:

was not even sufficient to meet the demands of growing international trade and investment. Further, a sizable share of the world's known gold reserves was located in the

5965: 4991: 4942: 600:

Thus, the more developed market economies agreed with the U.S. vision of post-war international economic management, which intended to create and maintain an effective

6487: 5905: 5753: 4960: 1460:

workable—particularly as the use of the dollar as a reserve currency is essential to create the required international liquidity to sustain world trade and growth."

2857:

Note: Converted to euro on 1 January 2000 at €1 = FIM 5.94573. Prior to currency reform of 1 January 1963 values shown in new markkaa or FIM worth 100 old markkaa.

5477: 5413: 5366: 5130: 668:

had first threatened U.S. shipping in the 1790s), the disarmament of aggressors, and the "establishment of a wider and more permanent system of general security".

7006: 5815: 5631: 1324:

To encourage long-term adjustment, the United States promoted European and Japanese trade competitiveness. Policies for economic controls on the defeated former

274:

national policies – often mutually inconsistent – that emerged over the first half of the decade worked inconsistently and self-defeatingly to promote national

6114: 5800: 4925: 3324: 1025:

The big question at the Bretton Woods conference with respect to the institution that would emerge as the IMF was the issue of future access to international

208:. Furthermore, all the participating governments at Bretton Woods agreed that the monetary chaos of the interwar period had yielded several valuable lessons. 6482: 6094: 5680: 5282: 1213: 928: 113: 1357:

U.S. was untouched by the war, in the instability of the nation states of postwar Europe, and the wartime devastation of the Soviet and European economies.

6047: 5997: 5795: 5398: 5341: 5011: 6912: 5898: 5893: 5888: 5883: 5878: 5873: 5868: 5820: 5714: 5336: 3126:

Comments by John Maynard Keynes in his speech at the closing plenary session of the Bretton Woods Conference on 22 July 1944 in Donald Moggeridge (ed.),

6104: 5785: 5663: 5242: 5188: 5105: 5021: 5006: 609:

their price levels. If anything, Bretton Woods was a return to a time devoid of increased governmental intervention in economies and currency systems.

4508: 1606:

these changed realities was impeded by the U.S. commitment to fixed exchange rates and by the U.S. obligation to convert dollars into gold on demand.

6240: 5383: 5100: 3518:

Gardner, Richard. Sterling Dollar Diplomacy: Anglo American Collaboration in the Reconstruction of Multilateral Trade. Oxford: Clarendon Press, 1956.

1494:

price. U.S. gold reserves remained depleted due to the actions of some nations, notably France, which continued to build up their own gold reserves.

3913:

Marie Christine Duggan (2013). "Taking Back Globalization: A China-United States Counterfactual Using Keynes' 1941 International Clearing Union" in

6957: 6839: 6578: 5658: 5438: 4930: 4896: 4817: 1218:

The agreement made no provisions to create international reserves. It assumed new gold production would be sufficient. In the event of structural

757:

managed by a series of newly created international institutions using the U.S. dollar (which was a gold standard currency for central banks) as a

7389: 6736: 6214: 5858: 5853: 5709: 5207: 753:, but the architects of Bretton Woods did not consider this option feasible for the postwar political economy. Instead, they set up a system of 53:

and other countries, a total of 44 countries after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully

5482: 5388: 4879: 4808: 3528: 723:

Woods as "the greatest blow to Britain next to the war", largely because it underlined the way financial power had moved from the UK to the US.

532:

The developed countries also agreed that the liberal international economic system required governmental intervention. In the aftermath of the

421:

all countries might rise, thereby eliminating the economic dissatisfaction that breeds war, we might have a reasonable chance of lasting peace.

4554: 7396: 6535: 6146: 5910: 5423: 5418: 5393: 5257: 5080: 5031: 4908: 4884: 3459:

Marie Christine Duggan, "Taking Back Globalization: A China-United States Counterfactual Using Keynes' 1941 International Clearing Union" in

5546: 1345:

about respective zones of influence; this same year Germany was divided into four occupation zones (Soviet, American, British, and French).

6963: 6545: 6530: 6175: 6109: 5653: 5140: 1029:

and whether that source should be akin to a world central bank able to create new reserves at will or a more limited borrowing mechanism.

6995: 5467: 798:

This decrease in the amount of money would act to reduce the inflationary pressure. Supplementing the use of gold in this period was the

560:

goals could not be realized without some form of international collaboration—all resulted in "beggar-thy-neighbor" policies such as high

3431:

Skidelsky, Robert. John Maynard Keynes 1883–1946: Economist, Philosopher, The Statesman. London, Toronto, New York: Penguin Books, 2003.

7000: 6202: 6136: 5848: 5775: 5758: 5120: 5070: 4996: 4937: 4873: 3666:

Baruch to E. Coblentz, 23 March 1945, Papers of Bernard Baruch, Princeton University Library, Princeton, N.J quoted in Walter LaFeber,

1882:

Over the course of the crisis, the IMF progressively relaxed its stance on "free-market" principles such as its guidance against using

818:

made the dollar as good as gold. In fact, the dollar was even better than gold: it earned interest and it was more flexible than gold.

120:. The United States, which controlled two-thirds of the world's gold, insisted that the Bretton Woods system rest on both gold and the 73:

of fine gold (or 0.88867 gram fine gold per dollar). It also envisioned greater cooperation among countries in order to prevent future

7462: 7432: 5494: 5202: 4981: 4920: 1831:. This proved to be the beginning of the collapse of the Bretton Woods System. The end of Bretton Woods was formally ratified by the 1815:

their currencies versus the dollar. The group also planned to balance the world financial system using special drawing rights alone.

400:

Also based on experience of the inter-war years, U.S. planners developed a concept of economic security—that a liberal international

227:. Intransigent insistence by creditor nations for the repayment of Allied war debts and reparations, combined with an inclination to 4653:

Michael D. Bordo and Barry Eichengreen; A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform; 1993

7427: 6893: 6502: 6208: 6042: 5329: 5267: 5227: 5115: 4779: 4396: 500: 3646: 1598:

by the new international currency markets, with their vast pools of speculative capital moving around in search of quick profits.

1436:

on 1 November 1961 between eight nations. The theory behind the pool was that spikes in the free market price of gold, set by the

7447: 6347: 5016: 4869: 4799: 3422:

Keynes, John Maynard. "Economic Consequences of Mr. Churchill (1925)" in Essays in Persuasion, edited by Donald Moggridge. 2010 .

472: 3445:

The Origins of International Economic Disorder: A Study of United States International Monetary Policy from WW II to the Present

1748:, represented the point where holders of the dollar had lost faith in the ability of the U.S. to cut budget and trade deficits. 1740:

by the Federal Reserve caused the dollar to become increasingly overvalued. The drain on U.S. gold reserves culminated with the

6676: 6540: 6525: 6375: 5648: 5571: 5428: 5403: 4848: 4739:

Proceedings and Documents of the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, 1–22 July 1944

4039: 3016: 1812: 4247:

Gray, William Glenn (2007), "Floating the System: Germany, the United States, and the Breakdown of Bretton Woods, 1969–1973",

3256: 657:, Roosevelt set forth a range of ambitious goals for the postwar world even before the U.S. had entered the Second World War. 7337: 6969: 6827: 6731: 6492: 6255: 6158: 6124: 6027: 6007: 5938: 5726: 5697: 5675: 5566: 5499: 5287: 5232: 4201: 3291: 1823:

continued to cause pressure on its official rate; soon after a 10% devaluation was announced in February 1973, Japan and the

1646: 1139: 453: 4701:

Gavin, F. J. (2002). "The Gold Battles within the Cold War: American Monetary Policy and the Defense of Europe, 1960–1963".

479: 25:

The price of gold, as denominated in US dollars, was stable until the collapse of the Bretton Woods system in the mid-1970s.

7384: 7247: 6571: 6079: 5702: 5472: 5058: 5043: 5026: 4583: 4101: 3927: 692:

reopen and control the rules of the world economy, so as to give unhindered access to all nations' markets and materials.

7317: 7307: 6671: 6170: 6165: 5589: 5457: 5319: 5222: 5145: 5085: 1043:

at the inaugural meeting of the International Monetary Fund's Board of Governors in Savannah, Georgia, U.S., 8 March 1946

4748: 4744: 7150: 6881: 6608: 6370: 6291: 5536: 5324: 5314: 4986: 4949: 4637: 3937: 3898: 3052: 1760: 1744:

collapse in March 1968. By 1970, the U.S. had seen its gold coverage deteriorate from 55% to 22%. This, in the view of

4483: 486: 327:

writes that on almost every point where he was overruled by the Americans, Keynes was later proved correct by events.

7422: 7297: 7257: 7184: 7174: 7022: 6975: 6899: 6603: 6497: 6276: 5960: 5692: 5561: 5292: 5272: 5212: 5197: 4326: 4231: 4130: 3867: 3840: 3769: 3629: 3563: 1672: 973:

by more than 10% with IMF approval, which was contingent on IMF determination that its balance of payments was in a "

519: 260: 1686:

unbalanced spending of the Johnson administration had transformed the dollar shortage of the 1940s and 1950s into a

1654: 782:

Imbalances in international trade were theoretically rectified automatically by the gold standard. A country with a

320: 200:

There was a high level of agreement among the powerful nations that failure to coordinate exchange rates during the

7437: 7359: 7267: 7237: 7180: 6933: 6187: 5356: 3723:

Ikenberry, G. John (1992). "A World Economy Restored: Expert Consensus and the Anglo-American Postwar Settlement".

409: 3556:

The Past and Future of International Monetary System: With the Performances of the US Dollar, the Euro and the CNY

7287: 7277: 6564: 5943: 5361: 5346: 4915: 4891: 4076:"Money Matters, an IMF Exhibit – The Importance of Global Cooperation, System in Crisis (1959–1971), Part 4 of 7" 1849: 966:

strongly appreciated in the rest of the world and therefore became the key currency of the Bretton Woods system.

703:

Before the war, the French and the British realized that they could no longer compete with U.S. industries in an

468: 224: 7467: 7327: 7227: 6981: 6951: 6401: 5541: 5065: 5001: 4903: 1650: 1420:, a Belgian-American economist, noticed that holding dollars was more valuable than gold because constant U.S. 974: 951: 457: 278:, increase national exports, divert foreign investment and trade flows, and even prevent certain categories of 232: 130: 4418: 6618: 6235: 6153: 6074: 6032: 5992: 5920: 5601: 5526: 5511: 4840: 4611: 3130:(London: Cambridge University Press, 1980), vol. 26, p. 101. This comment also can be found quoted online at 1490: 601: 248: 247:

inflationary policy probably offset some of the contractionary forces in world price levels (see Eichengreen

215:

was fresh in the minds of public officials. The planners at Bretton Woods hoped to avoid a repetition of the

109: 3965: 556:

school of economics, which asserted the need for governmental intervention to counter market imperfections.

7233: 7223: 7164: 7041: 6887: 6869: 6863: 6751: 6598: 6406: 6141: 6002: 4772: 4703: 3680:

Lundestad, Geir (September 1986). "Empire by Invitation? The United States and Western Europe, 1945–1952".

3076:

For discussions of how liberal ideas motivated U.S. foreign economic policy after World War II, see, e.g.,

1811:. The U.S. pledged to peg the dollar at $ 38/ounce with 2.25% trading bands, and other countries agreed to 1793: 129:

Barry Eichengreen, the Bretton Woods system operated successfully due to three factors: "low international

101: 4145: 6472: 6340: 5217: 5036: 4664:

The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order

4319:

Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System

1824: 1549: 1424:

deficits helped to keep the system liquid and fuel economic growth. What would later come to be known as

1011: 924: 78: 5376: 4170: 3622:

Learning in Modern International Society: On the Cognitive Problem Solving Abilities of Political Actors

1101:

but to ensure that as the outgoing superpower Britain would be shuffled even further from centre stage.

774:

In the 19th and early 20th centuries gold played a key role in international monetary transactions. The

7452: 6875: 6012: 5975: 5970: 5556: 5304: 4976: 4864: 4733: 3384: 3347: 1522:

can and do make large international transfers of capital not only for investment purposes but also for

255: 157: 4019: 1409:'s election, a decade-long effort to maintain the Bretton Woods System at the $ 35/ounce price began. 645:

on a ship in the North Atlantic, was the most notable precursor to the Bretton Woods Conference. Like

7061: 6641: 6380: 5745: 5731: 5619: 5262: 5167: 5150: 4821: 4625: 3179: 3165: 3089: 3057: 1085:

vested with the power to create money and with the authority to take actions on a much larger scale.

783: 622: 3532: 7097: 7073: 6833: 6745: 6037: 6022: 5607: 4656:

Harold James; International Monetary Cooperation Since Bretton Woods; Oxford University Press, 1996

4562: 4193: 4187: 3101: 2933: 1872: 1756: 1635: 205: 105: 4468:

World bank to focus "much more investment in equitable job creation" (approx 5 mins into podcast)

1455:, and on 18 November 1967, the British government was forced to devalue the pound. U.S. President 493: 5982: 4765: 3413:

Ahamed, Liaquat. Lords of Finance: The Bankers Who Broke the World. New York: Penguin Press, 2009

3011: 1899: 1800: 1787:

Gold prices (US$ per troy ounce) with a line approximately marking the collapse of Bretton Woods

1639: 711:

dominated the 19th century, U.S. officials intended the second half of the 20th to be under U.S.

446: 413: 74: 4723: 4075: 3131: 1297:

substantial help or face economic, social and political deterioration of a very grave character.

404:

would enhance the possibilities of postwar peace. One of those who saw such a security link was

7442: 6822: 6333: 6069: 5531: 5252: 3580: 3035: 2970: 1887: 1876: 1828: 1745: 1699: 1161: 885: 845: 165: 97: 93: 4608:

Undoing the Liberal World Order: Progressive Ideals and Political Realities Since World War II

548:, which created a popular demand for governmental intervention in the economy, and out of the 7379: 7055: 7049: 6857: 6787: 6520: 6452: 6447: 6296: 6268: 6260: 6057: 5955: 5668: 5110: 4831: 4670: 3890: 3884: 3193: 1808: 1778: 1456: 1235: 638: 104:, United States, for the United Nations Monetary and Financial Conference, also known as the 6099: 1469: 1130:

insufficient, each nation in the system is also able to request loans for foreign currency.

6845: 6636: 6613: 6286: 6250: 6245: 6197: 5177: 3401: 3097: 3040: 1441: 1425: 1401: 1349: 1219: 855: 841: 216: 134: 54: 6018:

International Decade for a Culture of Peace and Non-Violence for the Children of the World

1093:

problem that placing too much of the burden on the deficit country would be deflationary.

412:

from 1933 to 1944. Hull believed that the fundamental causes of the two world wars lay in

8: 7457: 7079: 6920: 6811: 6757: 6396: 5987: 4465: 4171:

Speech by Darryl R. Francis, President Federal Reserve Bank of St. Louis (12 July 1968).

3371: 1721: 1445: 1421: 1254: 1036: 994: 946: 754: 308: 275: 254:

In the 1920s, international flows of speculative financial capital increased, leading to

239: 82: 4803: 4400: 1835:

in 1976. By the early 1980s, all industrialised nations were using floating currencies.

7195: 7085: 6781: 6775: 6709: 6119: 4377: 4299: 3970: 3829: 3748: 3740: 3705: 3697: 3305: 3297: 3235: 2919: 1737: 1285: 1040: 985:

The Bretton Woods Conference led to the establishment of the IMF and the IBRD (now the

791: 568: 316: 279: 4123:

Gold, Dollars, and Power – The Politics of International Monetary Relations, 1958–1971

1564:

Dissatisfaction with the political implications of the dollar system was increased by

1234:

and is perhaps now the most important agency of the Group. The IBRD had an authorized

219:

after World War I, which had created enough economic and political tension to lead to

7253: 7243: 7109: 6129: 6084: 6064: 5949: 5719: 5613: 5551: 5351: 4812: 4633: 4527:"Pacific Exchange Rate Service – Foreign Currency Units per 1 U.S. Dollar, 1950–2022" 4422: 4381: 4372: 4322: 4303: 4260: 4227: 4197: 4172: 4126: 3933: 3894: 3863: 3857: 3836: 3752: 3625: 3603: 3559: 3309: 3287: 3239: 3227: 3021: 1856:

and others called for a new international monetary system that some of them also dub

1585: 1257:

disequilibria. But this did not prove sufficient to get Europe out of its conundrum.

835: 642: 331: 152:, effectively bringing the Bretton Woods system to an end and rendering the dollar a 4050: 3709: 330:

Today these key 1930s events look different to scholars of the era (see the work of

183:

to trade oil only in US dollars, thus pegging the US dollar to oil and birthing the

7170: 7091: 7016: 6805: 6799: 6477: 5685: 5625: 5595: 5277: 4971: 4712: 4367: 4291: 4256: 4118: 3929:

The Summit: The Biggest Battle of the Second World War - fought behind closed doors

3824: 3732: 3689: 3499: 3279: 3219: 1804: 1741: 1433: 1231: 1074: 1026: 962: 758: 673: 634: 626: 594: 545: 533: 312: 271: 138: 117: 3223: 1468:

mid-March 1968 a dollar run on gold ensued through the free market in London, the

204:

had exacerbated political tensions. This facilitated the decisions reached by the

7293: 7283: 7190: 7103: 6692: 6587: 6432: 6427: 5048: 4590: 4414: 4024: 3781: 3529:"Review of Robert Skidelsky, John Maynard Keynes: Fighting for Britain 1937–1946" 3025: 1883: 1864: 1832: 1753: 1523: 1437: 1406: 1309: 1289: 1200: 1195: 871: 745: 680: 665: 654: 650: 401: 363: 354: 201: 176: 169: 34: 6310: 4694:

John Maynard Keynes and International Relations: Economic Paths to War and Peace

3207: 1867:

said, "we must rethink the financial system from scratch, as at Bretton Woods."

1165:

Second World War, European nations—particularly Britain—often resorted to this.

137:, and the dominant economic and financial position of the United States and the 7323: 7313: 7273: 7205: 7121: 6721: 6714: 6442: 4788: 3943: 3693: 1691: 1509: 1417: 1400:

negative. The first U.S. response to the crisis was in the late 1950s when the

1369: 1109:

What emerged largely reflected U.S. preferences: a system of subscriptions and

1048:

semi-colonies had "nothing to contribute and will merely encumber the ground".

737: 688: 646: 380: 161: 145: 46: 4295: 3736: 1337:

In 1945, Roosevelt and Churchill prepared the postwar era by negotiating with

593:, which also involved lowering tariffs and, among other things, maintaining a 164:) also became free-floating, and the subsequent era has been characterized by 7416: 7303: 7263: 7160: 7139: 6927: 6704: 6437: 6411: 4526: 3993:

States and the Reemergence of Global Finance: From Bretton Woods to the 1990s

3474:

States and the Reemergence of Global Finance: From Bretton Woods to the 1990s

3231: 3085: 3077: 3030: 1733: 1589: 1477: 1452: 1363: 1338: 1277: 1147: 905: 862: 799: 775: 750: 541: 291: 267: 153: 62: 38: 4716: 4394: 1783: 1429:

erode confidence in the dollar as the reserve currency created instability.

621:

Roosevelt and Churchill during their secret meeting of 9–12 August 1941, in

81:(IMF) to monitor exchange rates and lend reserve currencies to nations with 7354: 7333: 7200: 7133: 7127: 7115: 7067: 6793: 6356: 6315: 6192: 6052: 5053: 3301: 3252: 3003: 1464: 1110: 1082: 895: 807: 787: 597:

via fixed exchange rates that would be favorable to the capitalist system.

405: 358: 346: 342: 228: 220: 180: 125: 89: 66: 4738: 3786: 2608:

Note: Converted to euro on 1 January 1999 at €1 = 40.3399 Belgian francs.

923:

The rules of Bretton Woods, set forth in the articles of agreement of the

6851: 6763: 6556: 6281: 6095:

Standard Minimum Rules for the Treatment of Prisoners (the Mandela Rules)

4341:

Chace, J. (1998). Bretton woods ii? World Policy Journal, 15(1), 115-116.

3504: 3487: 1853: 1820: 1765: 1729: 1725: 1715: 1687: 1594: 1581: 1527: 1325: 1269: 1175: 1115: 935: 915: 704: 324: 212: 184: 58: 4352: 3283: 1207: 6666: 6182: 5247: 4659: 4469: 4449: 4397:"Senior figures call for new Bretton Woods ahead of Bank/Fund meetings" 4189:

The Gods That Failed: How Blind Faith in Markets Has Cost Us Our Future

4009:. Washington, D.C.: The Brookings Institution. pp. 105–07, 124–35. 3744: 1375: 1261: 1088:

In the case of balance of payments imbalances, Keynes recommended that

986: 826: 590: 460: in this section. Unsourced material may be challenged and removed. 287: 70: 4272:

Blanchard (2000), op. cit., Ch. 9, pp. 172–73, and Ch. 23, pp. 447–50.

3701: 3389:

Super Imperialism: The Origin and Fundamentals of U.S. World Dominance

1566: 1123: 989:), which remain powerful forces in the world economy as of the 2020s. 7401: 7364: 6697: 3261: 1558: 1383: 970: 661: 553: 376: 335:

Golden Fetters: The Gold Standard and the Great Depression, 1919–1939

121: 50: 2958:

Left "European Monetary System", linked to a "basket" of currencies

1796:

countries took place, seeking to redesign the exchange rate regime.

1624: 786:

would have depleted gold reserves and would thus have to reduce its

617: 435: 7369: 6769: 6628: 5172: 5160: 4629: 3276:

Globalizing Capital: A History of the International Monetary System

2708:

Note: Converted to euro on 1 January 2001 at €1 = 340.75 drachmae.

2478:

Note: Converted to euro on 1 January 1999 at €1 = 166.386 pesetas.

1602: 1451:

In 1967, there was an attack on the pound and a run on gold in the

811: 712: 565: 264: 244: 4353:"Bretton Woods II Still Defines the International Monetary System" 2530:

Note: Converted to euro on 1 January 1999 at €1 = 2.20371 gulden.

7374: 6090:

Standard Minimum Rules for the Administration of Juvenile Justice

4757: 2422:

Note: Converted to euro on 1 January 1999 at €1 = 1,936.27 lire.

1695: 1609: 1281: 1032: 629:, which the U.S. and Britain officially announced two days later. 144:

On 15 August 1971, the United States "temporarily" suspended the

21: 6325: 5237: 5155: 5125: 5090: 4752: 4395:

George Parker, Tony Barber and Daniel Dombey (9 October 2008).

3278:(3rd ed.). Princeton University Press. pp. 124, 127. 1838: 1317: 1313: 1078: 942: 561: 549: 392: 42: 4482:

Georgieva, Kristalina; Washington, IMF Managing Director; DC.

2115:

Note: Converted to euro on 1 January 1999 at €1 = DM 1.95583.

695: 5135: 1342: 88:

Preparing to rebuild the international economic system while

3588:

Econometrics Laboratory - University of California, Berkeley

3115:

Economic Security and the Origins of the Cold War, 1945–1950

1910:

Dates are those when the rate was introduced; "*" indicates

582:

Economic Security and the Origins of the Cold War, 1945–1950

4509:"USD exchange rates | Bank of England | Database" 4350: 4282:

Mastanduno, M. (2008). "System Maker and Privilege Taker".

4185: 1915: 1516: 881: 149: 6488:

International Centre for Settlement of Investment Disputes

4175:. Statements and Speeches of Darryl R. Francis. p. 7. 4729:

Routledge Encyclopedia of International Political Economy

4146:"Memorandum of discussion, Federal Open Market Committee" 1247: 859: 37:

established the rules for commercial relations among the

4161:

United States Congress, Public Law 90-269, 18 March 1968

1614: 1584:

and the refusal of the administration of U.S. President

1276:

The United States set up the European Recovery Program (

1150:

in return for its loans to prop up national currencies.

840:

In the early 1970s, this graph shows some currencies at

168:. The end of Bretton Woods was formally ratified by the 3757:

Knowledge, Power, and International Policy Coordination

3425: 3374:, Economic Consequences of the Peace. MacMillan: 1920. 6483: