Bretton Woods Agreement

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Bretton Woods Agreement

An agreement signed by the original United Nations members in 1944 that established the International Monetary Fund (IMF) and the post-World War II international monetary system of fixed exchange rates.

Bretton Woods Agreement

An international agreement on monetary and currency policy for the period following World War II. Initially crafted in 1944 while the war was ongoing, it came into effect the following year. Among other things, the Bretton Woods Agreement created the International Monetary Fund and the International Bank for Reconstruction and Development. The latter organization was created to finance post-war reconstruction, while the IMF was intended to stabilize exchanges rates between currencies and to serve as a country's lender of last resort.

A key component of the Bretton Woods Agreement was the requirement that all countries peg their currencies to a certain amount of gold. In practice, most currencies were pegged to the U.S. dollar, which was itself pegged to gold. This helped the IMF accomplish its stated goals to stabilize currencies that had experienced a large amount of wartime inflation. The Agreement worked relatively well until the United States unilaterally depegged from gold in 1971. See also: Keynesian economics, Nixon shock.
References in periodicals archive ?
Ever since the breakdown of the so-called Bretton Woods system in the early 1970s, France and Germany have been trying to find a European-level equivalent.
Brics and AIID are alternatives to the Bretton Woods system of monetary management.
Add to that the deafening silence from the largest European countries on the issue, and it is possible that emerging economies, particularly China, will give up on advocating reform from within the Bretton Woods system.
In the wake of the collapse of the Bretton Woods system, Bartley and Melloan wrestled with the monetarist ideas of Milton Friedman and rejected floating exchange rates.
To this day the international order that was then established is known as the Bretton Woods system although, as discussed later, it has evolved into something that is very different from the original construct.
203) and put his name on it as a dilemma for the Bretton Woods system.
Financial outcomes of the Bretton Woods System inside the EU
White never wanted capital controls, but the Bretton Woods system could not work without them.
Wide gyrations in exchange rates became a staple of international financial markets after the Bretton Woods system broke down in the early 1970s, and mega-depreciations were commonplace later in the decade and through much of the 1980s, when inflation raged across much of the world.
The SDR is an international reserve asset that the IMF created in 1969 to support the Bretton Woods system of fixed exchange rates which was established at the end of World War II.
Under the Bretton Woods system of fixed exchange rates, countries pegged their currencies to the U.
In the early 1970s, the breakdown of the Bretton Woods system of semi-fixed exchange rates was one such useful crisis.