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Briefly Describe The Bretton Woods Agreement Of 1944

The Bretton Woods system was created in 1944 at a U.S. Treasury World Conference at the Mount Washington Hotel in Bretton Woods, New Hampshire, at the height of World War II. It was created to design a new international monetary order for the post-war period and to avoid the perceived problems of the interwar period: protectionism, beggar-neighbouring devaluations, hot money flows and unstable exchange rates. It also aimed to establish a framework for monetary and financial stability to promote global economic growth and the growth of international trade. Post-war global capitalism suffered from a huge shortage of dollars. The U.S. had huge trade surpluses and U.S. reserves were huge and growing. It was necessary to reverse this river. Although all nations wanted to buy U.S.

exports, the dollars had to leave the United States and be available for international use so that they could do so. In other words, the United States should reverse global prosperity imbalances by chartering a trade deficit financed by the U.S. outfed of reserves to other nations (a deficit in the U.S. fiscal balance). The United States could have a financial deficit, either by building plants, or by building plants, or by foreign nations. Remember that speculative investments were discouraged by the Bretton Woods agreement. Imports from other nations were not attractive in the 1950s because American technology was up to date at that time. This is how multinationals and global aid from the United States originated. [29] By studying the promotion of an international career in the financial field, experts are learning about the effects of international agreements such as Bretton Woods and the institutions they have created. Developing a strong international financial strategy means anticipating the impact of central bank announcements and actions, managed in the same way by national governments and international bodies.

The Bretton Woods Agreement was concluded in 1944 at a summit in New Hampshire, USA, on a website of the same name. The agreement was reached by 730 delegates representing the 44 allied nations who participated in the summit. Delegates, as part of the agreement, use gold standard gold In the simplest terms, the gold standard uses a system to understand the value of the currency, and this means that a currency is compared to how much it is worth in gold and at what price it can be exchanged for gold. to establish a fixed exchange rate. The security of money by the gold standard began to become a serious problem in the late 1960s.