The paper 'Important Features of the Bretton Woods Agreement" is a good example of a business case study. The Bretton Woods conference is the name that was given to the conference that was held at Breton Woods in the city of New Hampshire, the conference intentions were to form an international monetary system that was meant to manage money by establishing rules to be used for the mercantile and economic relation among the chief industrial countries in the mid 20th century. The Breton Woods system was among the initial example of a fully negotiated monetary order that was proposed to manage the relationship among the independent nations in terms of financial status (Schwartz, 2003). Seven hundred and thirty delegates from about forty-four nations met at mount Washington hotel that was in Bretons woods I united states in a bid to prepare for the rebuilding of the international economic system, this was happening while the world war two was raging fiercely.
The delegated, who attended the meeting deliberated during 22nd of July the year 1994. They signed the agreement on the last day of the delegate meeting (Mason & Asher, 2008). The international monetary fund and the international bank for reconstruction and development were the two organisation who came up with the rules, regulation and the procedures that were being used in the management of the monetary system.
These two planners are today members of the World Bank group. These organisations started being functional in the year 1945 this was after many nations had ratified the agreement (Schwartz, 2003). The most important feature of the Breton woods system was that it was compulsory for all member states obligation to adopt the policy on monetary and maintain the rates of exchange by Comparing their currency to the United States dollar and the capability of the international bank for reconstruction and development to bring together the temporary differences in the payments (Mason & Asher, 2008). Important features of the Breton Woods Agreement The most important features of the Bretton woods agreement are the articles of agreement that were made by the IMF, the articles of agreement define the newly made international monetary system of fixed rates of exchange.
In spite of the breakdown of the gold standard in the recent past, the delegates of the forty-four countries that had attended the meeting in Bretton wanted to still have a system in which the rates of exchange were fixed (Kirshner, 2004).
The system that was brought up by harry white before the commencement of the conference was to re-establish the system of having a fixed rate of exchange, but the fixed exchange regime at the moment was to allow economic adjustment for a very short term. The main anchor to the new system that was formulated the United States dollar; this currency would be convertible to gold at the rate of $35 per ounce (Mason & Asher, 2008).
The countries that participated in the agreement would then list their exchange rates in concurrence to the United States dollar, of which it would then be converted to gold. After the Second World War, the United States held the highest amount of gold supply in the world due to its renowned dominance in the first position in the world economy, this made the United States dollar the most appropriate currency to be used in the Bretton woods system.
The dollar also became known to be the international reserve currency, it also acted as a sign of global economic interdependency and without forgetting the strength of the United States economy (Kirshner, 2004). The main articles of IMF gave a clear distinction of the agreement of that was consisted of the new international monetary system that was characterized by the fixed rates of exchange agreements. The most pronounced difference between the Bretton woods agreement and the gold standard is the ability to make the short term economic adjustments, this occurred especially when the country is faced with the most fundamental disequilibrium.
Fundamental disequilibrium in this meticulous context is used to explain the perseverance of deficit or surpluses in a country’ s balance of payments at the fixed rate of exchange (Kirshner, 2004). The solution that was reached on by the delegates at the Bretton woods conference was the international monetary fund IMF. The IMF was to do work as the lender of the last resorts and as a watchdog to see that the policies that were put in place to be always inconsistency with the stability of the exchange rates (Mason & Asher, 2008).
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