Bretton Woods Conference
The Bretton Woods Conference, held in 1944, established the framework for the post-World War II international monetary system. It led to the creation of the International Monetary Fund (IMF) and the World Bank, with the goal of promoting global economic stability and development. The agreements made at Bretton Woods set the stage for economic cooperation and financial regulation among participating nations.
7 Key excerpts on "Bretton Woods Conference"
eBook - ePubUnderstanding Central Banking
The New Era of Activism
- David M Jones(Author)
- 2014(Publication Date)
- Routledge(Publisher)
...These distinguished delegates, including the famous British economist John Maynard Keynes, who led the British delegation and generally distrusted the gold standard, were hoping to reestablish global financial and economic stability. The immediate aim was to regulate the international monetary and financial system. The Bretton Woods Agreement also led to the establishment of (1) the General Agreement on Tariffs and Trade (GATT) to promote increased global trade; (2) the International Bank for Reconstruction and Development (IBRD), today referred to as the World Bank, to facilitate postwar reconstruction and development; and (3) the International Monetary Fund (IMF) to provide temporary liquidity for countries suffering from current account deficits. The hope of these conference participants, as they sought to repair a shattered global financial system, was that the largest among industrial Western democratic nations would set an example by lowering trade barriers and removing capital controls. The idea was to encourage the free flow of goods, services, ideas, labor, financial capital, and direct investment across previously closed national borders. The Bretton Woods Conference, lasting from July 1 to July 22, 1944, was intended not only to speed up post-World War II reconstruction and development but also to expand global trade and investment while promoting global growth. (A treasure trove of information on the Bretton Woods Agreement, after three weeks of plenary, committee, and subcommittee sessions followed by cocktail parties lasting late into the night, can be found in recently discovered transcripts of the conference; see Schuler and Rosenberg 2012.) Under the gold exchange standard and its system of fixed exchange rates, the U.S. dollar was tied to gold at $35 per ounce, and the currencies of other countries were fixed in relation to the U.S. dollar. The U.S...
eBook - ePubUnholy Trinity
The IMF, World Bank and WTO
- Richard Peet(Author)
- 2009(Publication Date)
- Zed Books(Publisher)
...TWO Bretton Woods: emergence of a global economic regime While the world was still engaged in the Second World War, forty-four nations, led by the USA and the UK, met at Bretton Woods, New Hampshire, on 1–22 July 1944, to discuss economic plans for the post-war peace. Governing the international economy was an idea made possible by the anarchy of the inter-war period. In reaction, governments sought to secure world peace and prosperity through international economic cooperation. Such cooperation would be based on a world market, in which capital and goods might move freely, regulated by global institutions operating in the general interests of greater stability and predictability. Three regulatory institutions were envisaged: the IMF, the International Bank for Reconstruction and Development (IBRD, later known as the World Bank), and an International Trade Organization (ITO), which came into being only as the General Agreement on Tariffs and Trade (GATT), but much later became the WTO. The IMF and IBRD were formalized as organizations during the Bretton Woods Conference, while the proposal for an ITO was part of a separate Havana Charter of 1947. This chapter looks at three aspects of the emergence of the new global economic accord. First I look at the political and economic conditions prevailing in the West between the late nineteenth century and the middle of the twentieth, the idea being to contextualize expressions of collective concern about the capitalist economy that led to Bretton Woods. Second, I outline the economic perspectives dominant at the time, from the intersection of which Bretton Woods policies emerged as a governance system for a world in crisis. Third, I look at the political economy of the conference itself, and the Bretton Woods model that resulted. Needless to say, these three lines are intertwined. My approach is historical-interpretive and historical-constructive...
eBook - ePub- Elizabeth Borgwardt(Author)
- 2007(Publication Date)
- Belknap Press(Publisher)
...The memory of the unsuccessful 1933 London Economic Conference, where President Roosevelt had emphatically abandoned multilateralism generally, served as a cautionary tale for the Bretton Woods delegates: “Looking back on that unhappy episode, it seems to have been caused primarily by divided counsel within the Administration and sloppy preparation,” wrote Acheson, “which obscured for both the President and the Secretary [of State] the relation between the foreign and domestic issues involved and the essential connection between foreign trade policy and international monetary arrangements.” But eleven years later, in 1944, “these issues had been resolved, and brilliant results were achieved at the International Monetary Conference at Bretton Woods.” 23 By the end of the 1930s, it was a truism that turning one’s back on the international economy would have unfavorable domestic repercussions. Wartime planners in the United States accordingly tried to see whether policymakers could develop “some system of organized international relations” not only to maintain postwar peace and security, but also to “promote the general welfare,” as former State Department official Ruth Russell explained in her magisterial history of the United Nations Charter. As Republican presidential candidate Wendell Willkie wrote in his runaway bestseller, One World, the flawed World War I settlement did not “sufficiently seek solution to the economic problems of the world. Its attempts to solve the world’s problems were primarily political...
eBook - ePubThe Political Economy of the Special Relationship
Anglo-American Development from the Gold Standard to the Financial Crisis
- Jeremy Green(Author)
- 2020(Publication Date)
- Princeton University Press(Publisher)
...3 Bretton Woods and the Keynesian State AFTER THE devastation of World War II, the United Kingdom and the United States were once again at the heart of efforts to reconstruct the international monetary order. But with the UK now gravely weakened by its role in a second major war in less than thirty years, the great reversal in power reached terminal velocity. By the end of the war the predominance of the US was beyond doubt. The UK’s junior role in the political economy of the Special Relationship was clearly evinced by US leadership of the Anglo-American negotiations that produced the Bretton Woods agreement of 1944. Bretton Woods is conventionally recognized as the marker for a new stage of hegemonic world order led by the US (Block, 1977; Gilpin, 1987: Schwartz, 2009a; Ikenberry, 2011). It signifies the final power transition between UK and US international leadership and concludes the disorderly and anarchic interregnum of the interwar years. 1 This chapter moves beyond existing IPE accounts of Bretton Woods by adopting a process-based approach that examines the formation and foundations of the agreement in conjunction with the patterns of state formation and the transformation of policy ideas within the Anglo-American political economies. 2 Rather than viewing the agreement as a neat transition to a postwar stage of US international hegemony, this chapter highlights important continuities with longer-term dynamics of Anglo-American development...
eBook - ePubBanking Crises
Perspectives from the New Palgrave Dictionary of Economics
- Garett Jones, Garett Jones(Authors)
- 2016(Publication Date)
- Palgrave Macmillan(Publisher)
...International Monetary Fund The International Monetary Fund (henceforth ‘the IMF’ or ‘the Fund’) was conceived at a conference at the Mount Washington Hotel in Bretton Woods, New Hampshire, in July 1944 and its Articles of Agreement entered into force in December 1945. The World Bank (henceforth ‘the Bank’) was set up at the same time. The IMF was established to promote international monetary cooperation and the elimination of exchange restrictions on current account transactions; to facilitate trade, economic growth and high levels of employment; to foster exchange rate stability; and to provide temporary financial assistance to countries so as to ease balance of payments adjustment. More specifically, it was given the role of supervising a system of pegged but adjustable exchange rates, which became known as the Bretton Woods system. In the first two sections of this entry we explain how the Bretton Woods system worked, and why it broke down in 1971. In the following sections we consider the roles which the Fund now plays, which differ from its original activities. They are: surveillance, ensuring stability for the international financial system and for individual economies within this system, and assisting the world’s poorest economies. As part of each of these three activities, the Fund also provides policy advice and technical assistance. This is a much less clear collection of responsibilities, and, as a result, the future direction of the Fund is somewhat uncertain. The aim of this article is to review the achievements of the Fund, and also the challenges that lie ahead...
eBook - ePubOur Finest Hour
Will Clayton, the Marshall Plan, and the Triumph of Democracy
- Gregory A. Fossedal(Author)
- 2021(Publication Date)
- Hoover Institution Press(Publisher)
...Some countries might have balance-of-payments problems, so they could apply to the IMF for a short-term loan to balance their books. Some countries might find it impossible to maintain the value of their currency at the agreed level, but they could adjust it in consultation with the IMF, rather than unilaterally. Still other countries might require long-term development assistance but not be able to attract sufficient private capital, so they could apply for loans and credits to another Bretton Woods creation, now called the World Bank. * * * The design created at Bretton Woods grew out of the lend-lease talks with Britain in May 1941. The chief British representative in those early negotiations, as he was again at Bretton Woods in 1944, was John Maynard Keynes, a brilliant, dapper, and highly persuasive advocate for His Majesty’s causes. At the 1941 meetings, Keynes suddenly alarmed the U.S. representatives by warning that postwar Britain might be so strapped financially that it would have to return to the practice of imperial trade preferences, bilateral negotiations, and competitive currency manipulations that had worked such havoc in world markets during the 1920s and 1930s. Keynes’s dour prediction may have been a tactical maneuver to improve lend-lease terms and to encourage the Americans thinking about alternative, internationalist postwar arrangements generally. If so, it worked. Keynes’s U.S. counterpart, Under Secretary of State Sumner Welles, began work on a statement in favor of postwar free trade and monetary cooperation that might be issued at the forthcoming meeting of Prime Minister Winston Churchill and President Franklin Roosevelt at Newfoundland in August 1941. The economic sections of the so-called Atlantic Charter affirmed the principles of nondiscrimination between trading nations and extolled harmonious cooperation. The charter, though, created no mechanism for enforcement and so opened the door for evasions and exceptions...
eBook - ePubThe Future of the International Monetary System
Change, Coordination of Instability?
- Omar F. Hamouda, Robin Rowley, Bernard M. Wolf(Authors)
- 2016(Publication Date)
- Routledge(Publisher)
...That was one reason why it was unwilling to accept without qualification the principle that surplus countries had a responsibility for balance-of-payments adjustment equal to that of deficit countries. Most countries were concerned about the possibility of a recurrence of a great depression after the war and an excessive surplus in the US balance of payments. If this should happen, they wanted the United States to have the primary responsibility for adjustment. The US pointed out that its payments surplus in the 1930s was entirely due to a capital flight from Europe and that its balance on current account had fallen sharply in the depression. More important, the US held that the great depression was the result of the restoration of the gold standard after World War I at inappropriate parities and that this need not happen after World War II. Nevertheless, the US agreed that if a scarcity of the dollar should occur, the International Monetary Fund would have authority to deal with it. The discussions before the Bretton Woods Conference did not set forth the conditions for maintaining exchange stability in a systematic way. The fullest statement of the US views was in the Questions and Answers on the International Monetary Fund, a document issued at the Bretton Woods Conference. One question was on the measures the IMF would recommend to a country whose currency was scarce - that is, to a super-surplus country - which led to the following statement: In general, there is little reason to expect that it will be necessary to recommend measures designed to encourage domestic expansion in the country whose currency is scarce. Nevertheless, if such recommendations are needed, they should be made.....
