The Most Important Features of the Bretton Woods Agreement Essay

Essays on The Most Important Features of the Bretton Woods Agreement Essay The paper "The Most Important Features of the Bretton Woods Agreement" is an outstanding example of an essay on marketing. According to studies, globalization has led to tremendous changes in the economic environment. The capital movements continue to become bigger as well as less controllable with time (Wildand Wild, 2011). This, as a result, means that the necessity for stabilizing systems becomes apparent. Such a system was developed at the Bretton woods conference some years ago. John Maynard Keynes, a British economist in the year 1944 stressed the significance of the rule-based regimes to make the business expectations stable (Wild and Wild, 2011). This is something that he was in agreement with the fixed exchange rates of the Bretton woods system. Over the current years, the leading industrial states have been advocating for the renewing of the reason and role as well as the spirit of the Bretton, system to withstand the mounting size of capital flows and the global trade (Wil d and Wild, 2011).Studies have indicated that most States have tried to resuscitate the gold standard following the First World War. However, this collapsed completely over the great depression of the 1930s (Wild and Wild, 2011). According to some economists, compliance with the gold standard was a hindrance to the expansion of money rapidly by the monetary authorities to resuscitate the economic activity (Eichengreen, 1996). The representatives of the world’s leading nations held a meeting in New Hampshire to create a new international monetary system in the year 1944. This is because the US as at that time was responsible for more than half of the globe’s capacity to manufacture. In addition, it also held most of the gold from the universe (Eichengreen, 1996). The leaders, therefore, concluded that they needed to tie the currencies from the world to the dollar. After they agreed that, this should be converted into gold at a cost of around 35 dollars per ounce v.This essay aims at describing the main important features of the Bretton Wood Agreement. It identifies the reasons as to why the Bretton woods system broke down and lastly what replaced it after its break down.Bretton Woods Agreement most important featuresEvidently, the term is used to refer to the breakthrough system for monetary as well as management exchange rate, which was developed in the year 1944 (Dormael, 1978). The agreement was established in a United Nations conference on monetary and financial, which was held at the Bretton Woods, New Hampshire between 1st and 22nd July the year 1944. The main results of the conference comprised the formation of an International bank for development and reconstruction, International monetary fund, the suggested establishment of a modifiable pegged foreign exchange rate system (Dormael, 1978). It is apparent that the currencies were pegged to gold. In addition, the International Monetary Fund was bestowed with the mandate to intercede when th ere is an imbalance of trade (Wild and Wild, 2011).