Search results
Results from the WOW.Com Content Network
The price of gold, as denominated in US dollars, was stable until the collapse of the Bretton Woods system in the mid-1970s. The Bretton Woods system of monetary management established the rules for commercial relations among the United States, Canada, Western European countries, and Australia and other countries, a total of 44 countries [1] after the 1944 Bretton Woods Agreement.
Mount Washington Hotel. The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 allied nations at the Mount Washington Hotel, in Bretton Woods, New Hampshire, United States, to regulate what would be the international monetary and financial order after the conclusion of World War II.
In order to maintain the Bretton Woods system, the US had to run a balance of payments current account deficit to provide liquidity for the conversion of gold into U.S. dollars. With more US dollars in the system than were backed with gold under the Bretton Woods agreement, the US dollar was overvalued relative to gold.
The Bretton Woods exchange rate system prevailed until 1971 when the United States government suspended the convertibility of the US$ (and dollar reserves held by other governments) into gold. This is known as the Nixon Shock. [40] The changes to the IMF articles of agreement reflecting these changes were ratified in 1976 by the Jamaica Accords ...
The Bretton Woods system broke down, culminating in the Nixon shock of 1971, ending convertibility; but the US dollar has remained the de facto basis of the world monetary system, though no longer de jure, with various European currencies and the Japanese yen also being prominent in foreign exchange markets.
Under this system, nations would peg their exchange rates to the U.S. dollar, which would be convertible to gold at US$35 per ounce. [10]: 448 [21]: 34 [22]: 3 [23]: 6 This arrangement is commonly referred to as the Bretton Woods system. Rather than maintaining fixed rates, nations would peg their currencies to the U.S. dollar and allow their ...
From the end of World War II until about 1971, the Bretton Woods system of semi-fixed exchange rates meant that competitive devaluation was not an option, which was one of the design objectives of the systems' architects. Additionally, global growth was generally very high in this period, so there was little incentive for currency war even if ...
In 1944, the Bretton Woods system was established, which created the International Monetary Fund and introduced a fixed exchange rate system linking the currencies of most industrialized nations to the US dollar, which as the only currency in the system would be directly convertible to gold. [12]