scholarly journals A Brief History of the International Monetary System since Bretton Woods

2017 ◽  
Author(s):  
José Antonio Ocampo
Keyword(s):  
Global Economy ◽  
Ad Hoc ◽  
International Monetary System ◽  
Negative Effects ◽  
Bretton Woods ◽  
Monetary System ◽  
The Us ◽  
Us Government ◽  
History Of ◽  
The 1960S

The 1944 Bretton Woods Conference, which created the International Monetary Fund and the International Bank for Reconstruction and Development, was a major landmark in international cooperation. However, the Bretton Woods system came under increasing pressure in the 1960s due to the lack of a reliable adjustment mechanism to manage payment imbalances as well as the persistent asymmetries in the balance-of-payments pressures faced by surplus and deficit countries. In 1971 the system effectively collapsed when the US government suspended convertibility of dollars into gold for other central banks—a decision that would prove to be permanent. The system that evolved to replace it can be viewed as a ‘non-system’ with diverse ad hoc arrangements. Viewed overall this non-system has proved to be fairly resilient, but some of its major gaps continue to have negative effects on the global economy.

The Principles and Operation of the Bretton Woods International Monetary System in the Years 1944–1971. The Reasons for Its Collapse

2016 ◽  
Vol 8 (2) ◽  
pp. 0-0
Author(s):  
Zbigniew Klimiuk
Keyword(s):  
International Trade ◽  
World Economy ◽  
International Monetary System ◽  
The United States ◽  
International Liquidity ◽  
Bretton Woods ◽  
Monetary System ◽  
The Us ◽  
The World ◽  
The Stability

The subject of the article is an analysis of the role of the US dollar in the development of international trade and the world economy during the period of the Bretton Woods monetary system (1944–1971). The international monetary system existing at that time was, in principle, a gold exchange standard based mainly on the national currency of the United States. However, a relatively small role was also played by other currencies including, in particular, the pound sterling. It should be noted that the Bretton Woods rules did not match the conditions in the world economy which emerged after World War II. The main areas of criticism concerned such assumptions as the maintenance of an official fixed price for gold, or a too narrowly interpreter postulate for the stability of the exchange rate. On the other hand, it should be noted that the introduction of the stability of exchange rates and the abolition of restrictions on payments were fundamentally sound decisions. They led in fact to the minimisation of a risk inherent in international trade and its rapid growth. One should also emphasise the fact that from the very beginning, in the international gold based monetary system there was an internal contradiction (paradox), which eventually led to its collapse. This was namely the fact that the growth in world trade created a growing demand for international liquidity. This was tantamount to a necessity to maintain a permanent balance of payments deficit in respect of the country whose currency was considered the key currency. At the same time, the growing volume of the US currency resulted in an increasing crisis of confidence in the dollar.

Ideas, Interests, and the Transition to a Floating Exchange System

2020 ◽  
Vol 32 (2) ◽  
pp. 151-182
Author(s):  
YOUN KI ◽  
YONGWOO JEUNG
Keyword(s):  
Exchange Rates ◽  
International Monetary System ◽  
Business Leaders ◽  
Business Practices ◽  
Global Finance ◽  
Economic Interests ◽  
Monetary System ◽  
The Us ◽  
Us Government ◽  
Material Interests

Abstract:Milton Friedman’s idea of flexible exchange rates was heresy for Americans until the mid-1960s. However, by the late 1970s the idea became embedded in academic thought, policymaking, and business practices. This article analyzes how floating currencies, once eschewed, became embraced as legitimate in the US through the late 1960s and early 1970s. It demonstrates how business leaders’ economic interests and laissez-faire economists’ framework for causes of and solutions to business hardships contributed to society’s acceptance of currency flexibility. Increasing societal support of flexible currencies strengthened the power of float-advocates within the US government, facilitating the transition of the international monetary system from fixed exchange rates to floating. This study highlights how material interests and policy discourses contributed to America’s new policy orientation. It also addresses the origins of the neoliberal international financial order by documenting how American elites reconstituted the state-market balance in global finance while navigating monetary crises.

What the US Should Learn from China for a More Balanced and Peaceful World

2012 ◽  
Vol 5 (3) ◽  
pp. 50-63 ◽  
Author(s):  
Fabio Massimo Parenti
Keyword(s):  
United States ◽  
Global Economy ◽  
International Monetary System ◽  
The United States ◽  
Economic Governance ◽  
Social Scientists ◽  
Systematic Analysis ◽  
Monetary System ◽  
The Us ◽  
The U.S

The growing importance of China in the global economy affects the reconfiguration of the international geography of power. In this scenario, the geopolitical order will be significantly redefined by the evolution of relations between China and the U.S. Based on the outcome of previous studies, and on the extensive efforts made by some social scientists, this paper provides a systematic analysis of the complexity and strategic implications of China–US relations. To make sense of these multivalent relations, after an initial introduction the paper is organized in three sections. The first section explores the structurally asymmetrical nature of relations between China and the US, focusing on economic policy decisions made by national elites. The second section focuses on the deepening U.S. debt, also underscoring the latest transformation trends experienced by an international monetary system that is still dollar–centred, and which several parties deem to be unsustainable. Lastly, the third section tries to provide evidence that growing instability in the global geopolitical order is intimately related to the economic and financial unbalances between China and the U.S. Hence, promoting more effective cooperation between China and the United States seems to be a priority. As substantiated in this paper, cooperation should, however, make the most of the Chinese developmental path, compared to that adopted by the United States – in terms of economic governance and geopolitical developmental path.

scholarly journals Le système monétaire européen à la lumière de l’expérience et de la théorie monétaires

2005 ◽  
Vol 12 (3) ◽  
pp. 465-474 ◽  
Author(s):  
Roger Dehem
Keyword(s):  
Gold Standard ◽  
International Monetary System ◽  
Macroeconomic Policies ◽  
Monetary Policies ◽  
Bretton Woods ◽  
The Past ◽  
Monetary System ◽  
The Sixties ◽  
History Of ◽  
The One

In the light of monetary experience and theory, the EMS appears to be unsustainable. Monetary history of the past sixty years shows that every attempt to stabilise the international monetary System has been frustrated as a consequence of divergent egocentric monetary policies. The breakdown of the rules of the gold standard game in the twenties, as well as the use of money as an instrument in national macroeconomic policies under the Bretton Woods regime have ultimately led to the demise of the fixed exchange rates System. In the sixties, European views on monetary policies were quite divergent, but in the seventies institutional attempts were made to bring them apparently into line. The "snake" arrangements, initiated in 1972, soon degenerated. The more ambitious attempt of 1979, the institutionally more elaborate EMS, suffers from the same basic weakness as all the previous ones. It lacks a common monetary standard, such as the one proposed in the 1975 Ail-Saints Manifesto. Such a standard is a necessary and a sufficient condition for a sustainable common monetary System.

scholarly journals Bretton Woods 2 system and US balance of payment deficit

2008 ◽  
Vol 60 (1) ◽  
pp. 116-136
Author(s):  
Zaklina Stepanovic-Petrac
Keyword(s):  
International Monetary System ◽  
Financial Architecture ◽  
Bretton Woods ◽  
Monetary System ◽  
International Financial Architecture ◽  
National Currencies ◽  
The Us ◽  
The Usa ◽  
Us Dollar ◽  
Foreign Exchanges

The author explores the evolution, functioning, similarities and differences between the original Bretton Woods international monetary system that operated from 1945 to 1973 and the present modified institution, which is symbolically called Bretton Woods 2 System. The existing international financial architecture keeps on being based on the hegemony of the US dollar, as a dominant reserve currency. However, in spite of the fact that in most cases the present international monetary system implies the regime of flexible foreign exchanges rates, a characteristic of this system is that many countries in different degrees refuse to accept the appreciation of their national currencies to the US dollar. At the same time, the domination of the USA, the most indebted country in the world, is becoming a very serious threat to its sustainability. However, as the author concludes, the creators of the international monetary system, being aware how serious could be the consequences of its cessation, endeavor to extend its operation accepting less expensive consequences of keeping it alive.

7. Under the Shadow of Stagflation

2017 ◽  
Author(s):  
Richard T. Griffiths
Keyword(s):  
Economic Growth ◽  
European Integration ◽  
International Monetary System ◽  
Case Law ◽  
Transitional Period ◽  
Economic Downturn ◽  
Monetary System ◽  
European Court ◽  
History Of ◽  
The 1960S

This chapter examines European integration during the 1970s. The 1970s is often portrayed as a dismal decade in the history of European integration, when the European Community (EC) experienced severe turbulence as it digested Britain's accession and was buffeted by the global economic downturn. Stagflation and Eurosclerosis — sluggish economic growth combined with institutional immobility — ensued. At the same time, however, the Community developed in important ways. The European Court of Justice generated an impressive body of case law, and the EC coped with the challenges of enlargement, the break-up of the international monetary system, and the consequences of slower economic growth. The chapter rejects the notion that the 1970s was a dismal decade in the history of European integration and describes it as a transitional period between the launch of the Community in the 1960s and the acceleration of European integration in the 1980s.

Affirmative Action and Higher Education

2020 ◽  
pp. 19-40
Author(s):  
J. Scott Carter ◽  
Cameron D. Lippard
Keyword(s):  
Higher Education ◽  
Affirmative Action ◽  
Controversial Subject ◽  
The Us ◽  
Us Government ◽  
History Of ◽  
The Subject ◽  
The Government ◽  
The 1960S

This chapter discusses the ever-evolving role of race in politics in the history of the US. How the government handled racial and other discrimination has not always been effective. It was not until the 1960s that the US government attempted to make a concrete effort to minimize racial discrimination, which of course effected enrollment at elite US colleges and universities. This chapter then goes onto to discuss the deep ideological divide over affirmative action that exists in the country and provides public opinion data on where whites stand with the subject. This chapter demonstrates that indeed affirmative action is a controversial subject that receives little support from whites.

Sterling, International Monetary Reform and Britain's Applications to Join the European Economic Community in the 1960s

2002 ◽  
Vol 11 (3) ◽  
pp. 345-369 ◽  
Author(s):  
Catherine Schenk
Keyword(s):  
Ad Hoc ◽  
European Economic Community ◽  
International Monetary System ◽  
International Community ◽  
Economic Community ◽  
Monetary Reform ◽  
European Economic ◽  
Monetary System ◽  
Gradual Process ◽  
The 1960S

Throughout the 1960s the international monetary system crumbled in a gradual process which was punctuated by a series of crises. The international community proposed, debated and ultimately procrastinated over major reforms, and opted instead for ad hoc ‘plumbing’ solutions such as the Gold Pool and bilateral currency swaps. While this turmoil unfolded, Britain made repeated attempts to join the European Economic Community. This article shows that while monetary issues were not as often publicly discussed, they were a crucial factor in the negotiations for British membership. It also aims to bring together the discussions on the reform of the international monetary system in the 1960s with those on the enlargement of the EC.

The Long-Predicted Failure of the Post-Bretton Woods “Non-System”

2022 ◽  
pp. 1-8
Keyword(s):  
Saudi Arabia ◽  
Exchange Rates ◽  
Bretton Woods ◽  
Monetary System ◽  
The Us ◽  
The World ◽  
Us Government ◽  
Oil Shock ◽  
World Economic ◽  
Us Dollar

The monetary system implemented at Bretton Woods in 1944 made the US dollar the centre of the world economic system, with 43 other countries' currencies linked to it via fixed exchange rates. However, once the US government broke its promise to redeem dollars in gold at $35 per ounce on August 15, 1971, expansion of the supply of dollars was no longer constrained, and like many currencies before it, the lack of monetary discipline led to inflation through which the value of the dollar has fallen by about 98%. The “oil shock” of the 1970s led to the introduction of the “petro-dollar” system whereby Saudi Arabia, then the largest oil producer, agreed to accept only US dollars in payment for its oil in exchange for the US government's pledge to defend it. This shored up demand for the fiat US dollar, enabling it to survive until its now approaching endgame.

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