What Is Meant By Bretton Woods Agreement In Points

There was broad consensus among powerful nations that the lack of exchange rate coordination during the interwar period had exacerbated political tensions. This facilitated the decisions of the Bretton Woods conference. In addition, all the Bretton Woods governments agreed that the monetary chaos of the interwar period had brought some valuable lessons. The agreement also facilitated the creation of very important financial structures: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now known as the World Bank. The IMF has attempted to provide for exchange rate adjustments from time to time (a change in the face value of a member) by an international agreement. Member States have been allowed to adjust their exchange rates by 1%. This trend has been to restore the balance of trade by increasing exports and reducing imports. This would only be permissible if there was a fundamental imbalance. A depreciation of a country`s money was described as a devaluation, while an increase in the value of the country`s money was described as an appreciation. In early 1945, Bernard Baruch described the spirit of Bretton Woods as follows: “If we can put an end to labour subsidies and southerly competition in export markets” and prevent the reconstruction of war machines, “… Oh, my boy, my boy, what long-term prosperity we`re going to have. [20] The United States therefore uses its position of influence to reopen and control the [rules] of the global economy, in order to allow unfettered access to markets and materials of all nations.

The Bretton Woods Agreement was launched in 1944 at a conference of all allied nations of the Second World War. It took place in Bretton Woods, New Hampshire. As part of the agreement, countries promised that their central banks would maintain fixed exchange rates between their currencies and the dollar. The United States launched the Marshall Plan for the economic recovery of the European Union in order to provide significant financial and economic assistance to the reconstruction of Europe, largely through subsidies rather than loans. The member countries of the Soviet bloc, for example. B Poland, were invited to receive the subsidies, but obtained a favorable agreement with the COMECON of the Soviet Union. [31] In a speech at Harvard University on June 5, 1947