8reLLon Woods SysLem (19441971) llxed 8aLes wlLh

narrow 8ands
W A dollar based sysLem
W MalnLaln a flxed or pegged exchange raLe ln Lerms of gold or Lhe uS dollar
W uollar per gold value of $3300
W Allow currencles Lo flucLuaLe wlLhln a narrow band of 1
W CovernmenL lnLervenLlon
W lnLernaLlonal reserves
W World 8ank whlch now lncludes
lnLernaLlonal 8ank for 8econsLrucLlon and uevelopmenL
lnLernaLlonal uevelopmenL AssoclaLlon
lnLernaLlonal llnance CorporaLlon
MulLllaLeral lnvesLmenL CuaranLee Agency
lnLernaLlonal CenLre for SeLLlemenL of lnvesLmenL ulspuLes
W lnLernaLlonal MoneLary lund (lMl)
8esponslble for ensurlng Lhe sLablllLy of Lhe lnLernaLlonal flnanclal sysLem
Complles balanceofpaymenLs sLaLlsLlcs
W Lxchange raLe sysLems
W egged or flxed exchange raLe sysLems
lorges a dlrecL llnk beLween lnflaLlon dlfferenLlals and employmenL levels
Can resulL ln large ad[usLmenLs
W lloaLlng exchange raLe sysLems
Allows exchange raLes Lo ad[usL for lnflaLlon dlfferences
Allows employmenL levels and wages Lo equallze Lhrough Lhe exchange raLe mechanlsm
SmlLhsonlan AgreemenL (19711973) llxed 8aLes wlLh
Wlder 8ands
W uollar per gold value was changed Lo $3802
W Allow currencles Lo flucLuaLe wlLhln a wlder band of 223
W LclecLlc Currency ArrangemenL
lree or Clean lloaL (March 1973)
Managed or ulrLy lloaL (!anuary 1976)
!olnL lloaL Luropean MoneLary SysLem (March 1979)
W lreely lloaLlng Lxchange 8aLe SysLem
MarkeL forces deLermlne Lhe exchange raLe
no governmenL lnLervenLlon
no need for lnLernaLlonal reserves
lndependenL moneLary and flscal pollcles
no caplLal flow resLrlcLlons
rlce lnsLablllLy
W ConLemporary Currency 8eglmes
lMS (naLlonal currencles arLlflclal currencles composlLe currency)
Lxchange 8aLe 8eglmes (8)
W 8lgldly flxed sysLem (euro area)
W lndependenLly floaLlng (developed and emerglng markeL counLrles)