How do you explain the rise and fall of the Bretton Woods...

How do you explain the rise and fall of the Bretton Woods system? How far the emergence of the Euro can be seen against the background of the need for exchange rate stability and the creation of an optimal currency area? 1) The rise and fall of the Bretton Woods system: The origins of the Bretton Woods system are to be found in the convergence of several key conditions: the shared experiences of the Great Depression, the concentration of power in a small number of states, and the presence of a dominant power willing and able to assume a leading role. The depression of the 1930s, followed by the war, had vastly diminished commercial trade, the international exchange of currencies, and cross-border lending and borrowing. The creators of†¦show more content†¦As the worlds greatest industrial power, and one of the few nations undamaged by the war, the U.S. stood to gain more than any other country from the opening of the entire world to unfettered trade. The United States would have a global market for its exports, and it would have unrestricted access to vital raw materials. Without a strong European market for U.S. goods and services, most policymakers believed, the U.S. economy would be unable to sustain the prosperity it had achieved during the war. Although the system was near perfect on paper, the real monetary relations after the war were anything but stable. After a short burst of activity IMF lending reduced in size to an extremely small scale, its pool of liquidity was clearly insufficient. The reserves of most countries were near exhaustion, there was a scarcity of gold held by Central Banks outside the US and hardly any prospects for the new gold production. As the consequence, America became the last source of the global liquidity growth with the rest of the world more than willing to increase their dollar holdings. Initially, a relatively open market was maintained for imports of foreign goods. In effect, an unspoken agreement was struck. Americas allies accepted its dominance that accorded the United States special privileges, such as to act abroad unilaterally to promote U.S. or collective interests. However, in the latter years of the Bretton Woods system these special privileges of the US came underShow MoreRelatedEurope Economic Crisis55278 Words   |  222 PagesCommission to the Council and the Parliament on the economic situation and developments, such as the Economic forecasts, the annual EU economy review and the Public ï ¬ nances in EMU report. Subscription terms are shown on the back cover and details on how to obtain the list of sales agents are shown on the inside back cover. Unless otherwise indicated, the texts are published under the responsibility of the Directorate-General for Economic and Financial Affairs of the European Commission, BU24, B-1049Read MoreOne Significant C hange That Has Occurred in the World Between 1900 and 2005. Explain the Impact This Change Has Made on Our Lives and Why It Is an Important Change.163893 Words   |  656 PagesMcKeown 9 †¢ 2 Twentieth-Century Urbanization: In Search of an Urban Paradigm for an Urban World †¢ Howard Spodek 53 3 Women in the Twentieth-Century World Bonnie G. Smith 83 4 The Gendering of Human Rights in the International Systems of Law in the Twentieth Century †¢ Jean H. Quataert 116 5 The Impact of the Two World Wars in a Century of Violence †¢ John H. Morrow Jr. 161 6 Locating the United States in Twentieth-Century World History †¢ Carl J. Guarneri 213