Chapter : 1. The Making of a Global World
Post-war Settlement and the Bretton Woods Institutions
Post-war Settlement and the Bretton Woods Institutions :
Main aim of the post-war international economic system was to preserve stability and full employment in the industrial world. its framework was agreed upon at the United nations Monetary and Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA. It established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development was set up to finance post-war reconstruction. The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins. The post - war international economic system is also often described as the Bretton Woods system. IMF and the World Bank commenced financial operations in 1947. Decision making in these institutions is controlled by the Western Industrial powers. The US has an effective right of veto over key IMF and World Bank decisions. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, were pegged to the dollar at a fixed exchange rate. The dollar itself was anchored to gold at a fixed price of $ 35 per ounce of gold.
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