What was the Bretton-Woods system ?
The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed valueplus or minus one percentin terms of gold and the ability of the IMF to bridge temporary imbalances of payments. In the face of increasing financial strain, the system collapsed in 1971, after the United States unilaterally terminated convertibility of the dollars to gold. This action caused considerable financial stress in the world economy and created the unique situation whereby the United States dollar became the "reserve currency" for the states that signed the agreement.
Design of the Bretton Woods system
The conference that gave birth to the system, held in the Amrican resort village of Bretton Woods, New Hampshire, wa ...more