Bretton Woods system is an agreement of monetary management, which established the rules for commercial and financial relations among the world's major industrial countries in the mid-20th century. There are about 730 delegates from 44 countries who discussed the development of world trade after the second World War in Bretton Woods, New Hampshire, United States in 1944.Thus, the agreement is called Bretton Woods system. and the video below shows the meeting;
There are three key points in this system. Firstly, the power of U.S. dollar. U.S.dollars have become a unique global currency in the world, while other countries have adopted a monetary policy to maintained the exchange rate by exchanging its currency to the U.S. dollar.Meanwhile, U.S. dollar is related to the gold, 35 dollar is equivalent one ounce of gold. Secondly, two institutions established during the period when the system was functioning,that is International Monetary Fund (IMF) and World Bank(WB). Both IMF and WB play a significant role on the development of world economics, even after the collapse of Bretton Woods system. Thirdly, adjustable fixed exchange rate, the exchange rate of other currencies to U.S.dollars can only fluctuate within 1%, which is so call official exchange rate. if the exchange rate is over the official rate, the local government has the responsibility to maintain the exchange rate stable.
Obviously, USA is the biggest winner after the announcement of Bretton Woods system, and the power of U.S.dollar had become unprecedented. In my point, the system is not only the symbol of prosperous of United States economics, but also a method that many countries attempt to develop the world economics and trade after the collapse of Gold standard.
There are three key points in this system. Firstly, the power of U.S. dollar. U.S.dollars have become a unique global currency in the world, while other countries have adopted a monetary policy to maintained the exchange rate by exchanging its currency to the U.S. dollar.Meanwhile, U.S. dollar is related to the gold, 35 dollar is equivalent one ounce of gold. Secondly, two institutions established during the period when the system was functioning,that is International Monetary Fund (IMF) and World Bank(WB). Both IMF and WB play a significant role on the development of world economics, even after the collapse of Bretton Woods system. Thirdly, adjustable fixed exchange rate, the exchange rate of other currencies to U.S.dollars can only fluctuate within 1%, which is so call official exchange rate. if the exchange rate is over the official rate, the local government has the responsibility to maintain the exchange rate stable.
Obviously, USA is the biggest winner after the announcement of Bretton Woods system, and the power of U.S.dollar had become unprecedented. In my point, the system is not only the symbol of prosperous of United States economics, but also a method that many countries attempt to develop the world economics and trade after the collapse of Gold standard.
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