The Bretton Woods System Essay -- Economics

The theme of this essay outlines two things. One, the key elements of Bretton woods formation and second, the characterisation of Bretton woods system by Ruggie as insert open-heartedism, and how far he succeeds in it. The Bretton woods system is widely referred to the transnational monetary regime, which prevailed from the end of the World War 2 until the early 1970s. later the end of the World War 2, the need of international monetary fabric to boost trade and economic growth and stability, was important. Taking its name from the website of the 1944 conference, attended by all forty-four allied nations the Bretton Woods system consisted of four key elements. First, to make a system in which individually member nation has to fix or peg his currency telephone replace rate against the gold or U.S. dollar, as the key currency. Secondly, the palliate transpose of currencies between countries at the established and fixed exchange rate positive or minus a one- percent margin. Thirdly, to create an institutional forum, so-called transnational Monetary Fund (IMF), for the international co-operation on money matters to set up, stabilize, and captivate over exchange rates. Fourth, to remove all the existing exchange controls change (protectionism) policies by the members, on the use of its currency for international trade. In fare the first scheme, as well as its later development and net demise, were directly dependent on the preferences and policies of its most powerful member, the United States. concord to John Gerard Ruggie, 1982, this Bretton woods system of monetary co-operation correspond the type of liberalism which modify domestic social economic stability along with a liberal trading order. He referred this system as embed... ...aracterised Bretton woods system as embedded liberalism to show how market forces were surrounded by social and governmental constraints. Embedded liberalism thus signifies a compromise between the excessive free international market economics and the excessive domestic protectionist policies. Ruggie embedded liberalism represented an enclosed international liberal trade within the post-war consensus of fixed exchange rates and capital controls. The fixed exchange rate helped to promote abiding liberal trade by removing any future uncertainty in exchange rate movements. Whereas for domestic social and economic stability, national government would use capital controls. All these practices were the key elements of Bretton woods system and too constitute the institution of embedded liberalism. Hence, Bretton woods system can be characterised as embedded liberalism.