International monetary system during the post-world war, International Economics

Assignment Help:

Q. How did the international monetary system influence macroeconomic policy-making and performance during the post-World War II years during which exchange rates were fixed under the Bretton Woods agreement (1946 - 1973)?

Answer: In July 1944 legislature of 44 countries met in Bretton Woods, New Hampshire, and signed the Articles of Agreement of the International Monetary Fund (IMF) and drafted and of the World Bank. The agreement predictable fixed exchange rates against the U.S. dollar and a consistent dollar price of gold - $35 an ounce. The dollar of the United States turns into the postwar world's key currency because of a few factors:

1. The untimely convertibility of the U.S. dollar in 1945.

2. The extraordinary position of the dollar under the Bretton Woods system.

3. The strength of the American economy comparative to the devastated economies of Europe and Japan.

4. Central banks obviously found it advantageous to hold their international reserves in the form of interest-bearing dollar assets.

The Marshall Plan an agenda of dollar grants from the United States to European countries was initiated in 1948. The majority countries in Europe didn't restore convertibility until the end of 1958 with Japan following in 1964.


Related Discussions:- International monetary system during the post-world war

Macroeconomic policy-making and performance, Q. How did the international m...

Q. How did the international monetary system influence macroeconomic policy-making and performance during the interwar period (1918 - 1939)? Answer: Governments efficiently sus

What monetary measures keep current exchange rate constant, Q. Suppose E is...

Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e

What effect do non-tradable goods have on ppp, What effect do non-tradable ...

What effect do non-tradable goods have on PPP? Answer:  The consequence is quite substantial.  In 1997 the production of non-tradable goods accounted for about 55% of U.S GNP.

Explain the advantages of free trade, 1. International trade: (a) Explai...

1. International trade: (a) Explain the concept of comparative advantage between two countries (use a numerical example to illustrate, and do not use the identical example in th

British economy, how is it the economy during the two wars and till 20 th

how is it the economy during the two wars and till 20 th

Discuss effects of ongoing inflation based on ppp theory, Discuss the effec...

Discuss the effects of ongoing inflation based on the PPP theory. Answer:  Other things equivalent money supply growth at a constant rate eventually results in ongoing price le

SRC, What does SRC stand for?

What does SRC stand for?

Explain the concepts of trade creation, When asked by the Carnegie Commissi...

When asked by the Carnegie Commission to prepare a report on post war Preferential Trading Agreements, Viner (1950) pointed out that they are not free trade. He used the concepts o

Show the effects of a permanent increase in the u.s. money, Q. Using figure...

Q. Using figures for both the short run and the long run, show the effects of a permanent increase in the U.S. money supply. Try to line up your figures to the short and long run

#foreign trade, What is the role of foreign trade in an economic developmen...

What is the role of foreign trade in an economic development of a country

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd