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The Bretton Woods Agreement Established The International Bank For Reconstruction And Development To

Although the Bretton Woods conference itself took place for only three weeks, preparations had been underway for several years. The main creators of the Bretton Woods system were the famous British economist John Maynard Keynes and the American chief economist of the US Treasury Harry Dexter White. Keynes` hope was to create a powerful global central bank called the Clearing Union, and a new international reserve currency called Bancor. White`s plan provided for a more modest credit fund and a greater role for the U.S. dollar, instead of creating a new currency. In the end, the adopted plan took ideas of both and tended more to White`s plan. A particular strength of this volume is the space it gives to the idea of the global South. Selwyn Cornish and Kurt Schuler show that Australia has tried to make full employment a central concern of the IMF, but Eric Helleiner documents how printing countries like China, some in Latin America and India – starting with a Sun Yat-sen document in 1920, which proposed an international development organization – led to the creation of the IRD as a “new multilateral framework for development.” Below is a brief summary of why global economies were part of the Bretton Woods system, how the system worked, why it failed, and what impact the agreement had on the development of the international monetary system. Modern economists can draw a perspective and insight from the discovery of their profession`s past. The Bretton Woods Agreement was launched in 1944 at a conference of all allied nations of the Second World War. It took place in Bretton Woods, New Hampshire. Despite the economic efforts imposed by such a policy, participation in the international market centre has given the United States unprecedented freedom of action in pursuing its foreign policy objectives.

A trade surplus facilitated the maintenance of armies abroad and to invest outside the United States, and as other nations could not maintain operations abroad, the United States had the power to decide why, when and how to intervene in global crises. The dollar continued to serve as a compass to guide the health of the global economy, and exports to the United States became the main economic objective of the development or new development of economies. This arrangement was called Pax Americana, analogous to the Pax Britannica of the late 19th century and the Pax Romana of the first. (See globalism) There was broad consensus among powerful nations that the lack of exchange rate coordination during the interwar period had exacerbated political tensions. This facilitated the decisions of the Bretton Woods conference. In addition, all the Bretton Woods governments agreed that the monetary chaos of the interwar period had brought some valuable lessons. From 1947 to 1958, the United States deliberately encouraged outflows of dollars, and from 1950 the United States ran a balance-of-payments deficit in order to provide liquidity to the international economy. The dollars passed through various U.S. aid programs: the Truman Doctrine, which included aid to the pro-U.S.

The Greek and Turkish regimes, which fought to suppress the communist revolution, helped several pro-American supporters. Regime in the Third World and, above all, the Marshall Plan. From 1948 to 1954, the United States provided $17 billion in grants to 16 Western European countries. Keynes`s proposals would have created a global reserve currency (which he said could be called a “bancor”) managed by a central bank with the ability to create money and with the power to take much larger action. To foster the growth of world trade and post-war financing of Europe, Bretton Woods planners created another institution, the International Bank for Reconstruction and Development (IBRD), one of the five agencies that make up the World Bank Group and is perhaps now the main agency [of the World Bank Group].

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