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The International Monetary System: The Bretton Woods System: 1945-1973
The International Monetary System: The Bretton Woods System: 1945-1973
Expected
Benefit from
the New
System
Source:
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Broz, Lawrance, Bretton Woods System, 2005. Retrieved from http://weber.ucsd.edu
Similarities to the
Gold Standard
Differences
with the Gold
Standard
Problems
Evolution
and
Breakdown
EXAMPLE
If Britain devaluated pound due to a CA
deficit, the foreign currency value of pound
assets would decrease, thus savings would
shift into other currencies. In order to hold the
pounds exchange rate against the dollar
pegged, the Bank of England should sell
foreign assets to market and buy pounds
instead. Now, without enough reserves, the
foreign reserves loss might cause a
devaluation, if large enough.
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References
-
Time Magazine, 21 October 2008, A Brief History of Bretton Woods System. Retrieved
from http://www.time.com/time/business/article/0,8599,1852254,00
Broz, Lawrance, Bretton Woods System, 2005, retrieved from http:// weber. ucsd.edu
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