Learn how and when to remove this template message Free trade relied on the free convertibility of currencies. Negotiators at the Bretton Woods conference, fresh from what they perceived as a disastrous experience with floating rates in the s, concluded that major monetary fluctuations could stall the free flow of trade. The new economic system required an accepted vehicle for investment, trade, and payments. Unlike national economies, however, the international economy lacks a central government that can issue currency and manage its use.
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The English used in this article or section may not be easy for everybody to understand. You can help Wikipedia by reading Wikipedia:How to write Simple English pages , then simplifying the article. March The Bretton Woods system was the first system used to control the value of money between different countries. It meant that each country had to have a monetary policy that kept the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold. The Bretton Woods system was the first monetary order that organized monetary relations among independent nation-states.
Plans to rebuild the international economic system after the end of World War II started before the war ended. The delegates discussed and then signed the Bretton Woods Agreements during the first three weeks of July The planners at Bretton Woods set up a system of rules, institutions, and procedures to regulate the international monetary system.
These organizations became active in after enough countries had ratified the agreement. Until the early s, the Bretton Woods system worked. It controlled conflict and achieved the common goals of the leading states that had created it, especially the United States. But in , In the face of increasing strain, the United States decided not to allow the conversion of dollars to gold and the system collapsed.
Bretton Woods System
The system of currency convertibility that emerged from Bretton Woods lasted until These countries saw the opportunity for a new international system after World War II that would draw on the lessons of the previous gold standards and the experience of the Great Depression and provide for postwar reconstruction. It was an unprecedented cooperative effort for nations that had been setting up barriers between their economies for more than a decade. They sought to create a system that would not only avoid the rigidity of previous international monetary systems, but would also address the lack of cooperation among the countries on those systems.
Bretton Woods system
The English used in this article or section may not be easy for everybody to understand. You can help Wikipedia by reading Wikipedia:How to write Simple English pages , then simplifying the article. March The Bretton Woods system was the first system used to control the value of money between different countries. It meant that each country had to have a monetary policy that kept the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold.
Bretton Woods Conference
It took place in Bretton Woods, New Hampshire. This is a monetary policy often used by central banks to control inflation. Members of the Bretton Woods system agreed to avoid trade wars. But they could regulate their currencies under certain conditions. They could also adjust their currency values to rebuild after a war.
Bretton Woods agreement
But perhaps no more. Before boarding a plane on Saturday to meet President George W. Europe demands it. Europe will get it. Just hours after their closed-door meeting had finished, Bush and Sarkozy, along with European Commission President Jose Manuel Barroso, issued a joint statement announcing that a summit would be held next month to devise what Barroso calls a "new global financial order.