International Financial Architecture
Essays on International Financial Architecture
Priyvrat Mamgain 2/25/2013
Topic 1: What were the outcomes of the Bretton Woods conference and which factors can account for the agreements reached at that conference? (1200 words) The Bretton woods conference is a United Nations Monetary and Financial Conference that was organized between 1 and 22 July 1944 at Mount Washington Hotel in Bretton woods, New Hampshire, United States. 730 delegates from 44 nations signed an agreement on the final day of the conference. This agreement went on to become one of the major agreements to govern the monetary relations of independent monetary states. But the obvious question which comes to my mind is why a need for an internationally negotiated monetary order was felt during that period? The reasons were the economic ramifications of the great depression and the concentration of power among a few major economies. Moreover, during the period of the Great depression, the economies engaged in the so called “beggar thy neighbor” policies i.e. competitive devaluation of the currencies by various economies in order to substitute imports with domestic goods and increase the competitiveness of the exports in the international markets. In addition, a number of countries also imposed trade barriers, restricting the recovery of international trade. Hence, the representatives from the major nations gathered at Bretton woods to agree upon a unified rules, procedures and institutions to avoid a repetition of a similar prolonged economic crisis. The following were the major outcomes of the Bretton woods agreement: Creation of Par value system, emergence of US dollar as reserve currency Convertibility of US dollar to gold at a fixed price Establishment of IMF for international cooperation on monetary matters Determining the power, functions and organization of the Fund Establishment of IBRD to finance the recovery of war inflicted nations
The members of the conference believed
Priyvrat Mamgain 2/25/2013
Topic 1: What were the outcomes of the Bretton Woods conference and which factors can account for the agreements reached at that conference? (1200 words) The Bretton woods conference is a United Nations Monetary and Financial Conference that was organized between 1 and 22 July 1944 at Mount Washington Hotel in Bretton woods, New Hampshire, United States. 730 delegates from 44 nations signed an agreement on the final day of the conference. This agreement went on to become one of the major agreements to govern the monetary relations of independent monetary states. But the obvious question which comes to my mind is why a need for an internationally negotiated monetary order was felt during that period? The reasons were the economic ramifications of the great depression and the concentration of power among a few major economies. Moreover, during the period of the Great depression, the economies engaged in the so called “beggar thy neighbor” policies i.e. competitive devaluation of the currencies by various economies in order to substitute imports with domestic goods and increase the competitiveness of the exports in the international markets. In addition, a number of countries also imposed trade barriers, restricting the recovery of international trade. Hence, the representatives from the major nations gathered at Bretton woods to agree upon a unified rules, procedures and institutions to avoid a repetition of a similar prolonged economic crisis. The following were the major outcomes of the Bretton woods agreement: Creation of Par value system, emergence of US dollar as reserve currency Convertibility of US dollar to gold at a fixed price Establishment of IMF for international cooperation on monetary matters Determining the power, functions and organization of the Fund Establishment of IBRD to finance the recovery of war inflicted nations
The members of the conference believed
References: Michael Bordo. "The Bretton Woods International Monetary System: A Historical Overview." National Bureau of Economic Research working paper number 4033 Benjamin Cohen "The Bretton Woods System." Routledge Encyclopedia of International Political Economy Harold James. International Monetary Cooperation Since Bretton Woods. Oxford University Press. 1996. Chapters 8 only Harry G. Johnson. "The International Monetary Crisis of 1971." Journal of Business, 1973. Triffin, R. (1988) Gold and the Dollar Crisis, New Haven, CN: Yale University Press. The original statement of the Triffin dilemma.