Bretton Woods Case Study

4069 Words 17 Pages


Bretton Woods’s system was established in 1944, the main aim of the system was to set pose regulations which led to the dollar to be the main international currency. This currency was the main requirement to of payment and purchase of foreign goods and services. This led to the straining of the underdeveloped markets which were not able to access the dollar, this led to them depending on the US to rend them the dollar to help in the importation of goods from abroad. There was also the major rule on the system, this was the setting of fixed exchange rates for the dollar. The dollar was the gold by then and the convertibility, thus a technique of adjustment of the changes mainly
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Be it to the fact that even the poorer countries which were not able to import goods, the system helped in ensuring that they had equal chances to do it. The US was the major beneficially being to fact that its national currency was the only one accepted to do the international trading. The other countries like Britain also had a huge share since they were involved in the negotiation table. Regardless to all these, the growing economies by then Germany and Japan had a different view on the progress of the system, thus they had a number of plans which eventually led to the downfall of the …show more content…
The innovation made during the BW times were unique and which at the moment possible don’t exist. The first and the major fact is on the currency: the current situation of the growth of the economies has left a small difference between the leading currencies in the market. That’s the dollar, British pound, and the euro. This brings the big difference in the possibility of there being negotiations in the drawing table to come up with a common currency to use. The differences in the liquidity in the global finances also has a big question. This is to the fact that the euro has shown the balance of its current accounts whereas the dollar has seen a number of liabilities in its account. This makes it difficulty in the discussion on unifying the

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