The formation and collapse of the Bretton Woods system, the three pillars of the world economic land

Bretton Woods system.

The root causes of the collapse are:

1. The defects of the system itself. The fundamental reason for the collapse of the dollar-centered international monetary system is the inextricable contradictions in the system itself. Under this system, the US dollar functions as a world currency as an international means of payment and an international means of reserves.

2. The dollar crisis and the U.S. economic crisis broke out frequently. Capitalism.

The world economy is in flux, and the dollar crisis is the direct cause of the collapse of the Bretton Woods system.

The main elements of the "Bretton Woods System" include the following:

1. The U.S. dollar is pegged to **. The States confirmed the official price of $35 per ounce set by the United States in January 1944, with the gold content per dollar being grams. Countries** or **banks may exchange U.S. dollars for U.S. dollars at official rates**.

In order to make the official price not subject to the free market gold price.

shock, countries need to cooperate with the United States.

In the international auction financial market, the Uyghur people celebrate this official price.

2. Other countries are pegged to the U.S. dollar, and other countries stipulate the gold content of their currencies, and determine the exchange rate with the U.S. dollar through the proportion of the gold content.

3. Implement an adjustable fixed exchange rate. International Monetary Agreement**

It stipulates that the exchange rate of the currencies of various countries against the US dollar can only fluctuate within a range of 1% above and below the legal exchange rate. If the market exchange rate fluctuates by more than 1% of the legal exchange rate, each country** is obliged to intervene in the foreign exchange market to maintain the stability of the exchange rate. If the change in the legal exchange rate of a Member State exceeds 1 per cent, it must be subject to the International Monetary Fund**.

Approval. In December 1971, the range of this spot rate change was broadened to the upper and lower ranges, and the criterion for determining "parity" was changed from ** to Special Drawing Rights.

This exchange rate system of the Bretton Woods system is known as the "adjustable peg exchange rate system".

4. Currency convertibility and international payment and settlement principles of various countries. The Agreement provides for the principle of free convertibility of national currencies: any Member State converts its national currency for the payment of current account transactions with other Member States in exchange for its own currency.

Taking into account the actual situation of each country, the Agreement provides for a "transition period". The Agreement stipulates the principle of international payment settlement: Member States shall not impose restrictions on the payment or settlement of the current account of the balance of payments without the consent of the organization.

Bretton Woods system.

The most fundamental reason for the collapse lies in the irreconcilable contradictions of the system itself. On the one hand, the dollar, as a means of international payment and reserves, requires a stable currency value, which requires the United States to have sufficient reserves.

and maintain a surplus in the international **.

This allows the US dollar to continue to flow in to enhance people's confidence in the stability of the US dollar.

On the other hand, the US dollar, as an international currency and means of payment and settlement, requires the United States to maintain a deficit in the international market, otherwise it will cause a shortage of international means of payment and foreign exchange reserves in various countries.

Inadequate situation. However, if the deficit increases, its corresponding ** reserves will continue to decrease, and the dollar will gradually be depreciated.

In addition, the United States launched wars against Korea and Vietnam one after another.

Military spending has increased dramatically, and there is a fiscal deficit.

It is huge and has to be compensated by the issuance of currency, resulting in increased domestic inflation;

In addition, the economic rise of Western Europe and other countries, all kinds of goods and services continue to be imported into the United States, resulting in a deficit in the United States balance of payments year after year, the continuous reduction of reserves, a large outflow of dollars, and a surplus of dollars in the international market, which has made the dollar exchange rate bear a huge impact and the fixed exchange rate system is in jeopardy.

The role of the Bretton Woods system.

The formation of the Bretton Woods system temporarily put an end to the chaos in the monetary and financial fields before the war and maintained the normal operation of the world monetary system after the war. The fixed exchange rate system is one of the pillars of the Bretton Woods system.

The crisis of the capitalist world economy caused a crisis of the monetary system, which led to the gold standard.

collapsed, and international monetary and financial relations presented a chaotic situation. The establishment of the Bretton Woods system, centered on the US dollar, has provided a unified standard and foundation for international monetary and financial relations, and the chaotic situation has been temporarily stabilized.

The rapid formation of the Bretton Woods system expanded the world in a relatively stable situation**.

The United States has distributed a large amount of dollars to the world through gifts, credits, and the purchase of foreign goods and services, which objectively plays a role in expanding the world's purchasing power.

At the same time, the fixed exchange rate system has eliminated the turbulence caused by exchange rate fluctuations to a large extent, stabilized the currency exchange rates of major countries to a certain extent, and is conducive to the development of international development.

The above content refers to the Encyclopedia-Bretton Woods system.

Before the collapse of the Bretton Woods system, the United States "couldn't hold on"?

Bretton Woods system.

The collapse was followed by the Jamaican system.

The Bretton Woods system was established in July 1944 by representatives of major Western countries at the United Nations International Monetary and Financial Conference, which was held in New Hampshire, USA.

Bretton Woods was held, so it was called the "Bretton Woods system". The system was terminated by Nixon in 1971.

In January 1976, the International Monetary Organization.

The Interim Committee on the International Monetary System met in Jamaica and arrived at the famous "Jamaica Agreement".

In April of the same year, the Board of Governors of the International Monetary Organization (IMO) adopted the Second Amendment to the International Monetary Agreement, which entered into force on April 1, 1978, thus forming a new international monetary system, the Jamaican system. The implementation of the Jamaican system has played a positive role in maintaining the operation of the international economy and promoting the development of the world economy.

The reasons for the collapse of the Bretton Woods system are varied. The immediate cause is the dollar crisis, and the fundamental reason is that the system does not reflect the uneven economic development of the countries among the Western industrial countries and the inherent defects of the system itself.

The main reasons for the collapse of the Bretton Woods system.

1. The special status of the US dollar has led to the US monetary policy having an important impact on the economies of various countries. Since the U.S. dollar is the main reserve asset and enjoys the name of "paper **", the United States can use the U.S. dollar to directly invest abroad, buy foreign companies, or use the U.S. dollar to make up for the balance of payments deficit. Every move of the U.S. monetary and financial authorities will affect the entire world financial sector, leading to instability in the world financial system.

2. Use a country's currency as the main reserve asset. It will inevitably bring insurmountable contradictions to international reserves, and the special status of the US dollar will have a dilemma: either the US balance of payments surplus and the US dollar value will be stable.

In this way, there is no guarantee of the ** of the US dollar; Either the US balance of payments deficit will widen and the US dollar will increase, but this will cause the US dollar's credit status and value to decline, and there will be a dollar crisis, which is an insurmountable contradiction.

3. The contradiction between the finite nature of the first and the unlimited growth of international settlement demand. The two sides of the contradiction are intertwined and work together to make the Bretton Woods system work, so that the system has hidden dangers lurking from the beginning. Due to the limitations of mineral deposits, mining, and smelting techniques, the increase in supply is quite limited and slow, far behind the growth of the world economy, and there is a serious imbalance between supply and demand.

4. The inflexibility of the exchange rate mechanism has led to the failure of the balance of payments adjustment mechanism. The Bretton Woods monetary system places too much emphasis on exchange rate stability, and the fixed exchange rate system makes it difficult for the parties to adjust the balance of payments by adjusting the exchange rate, and can only passively impose foreign exchange controls or abandon the policy objective of stabilizing the domestic economy. The former inevitably hinders the development of the country, and the latter violates the principle of stabilizing and developing the country's economy, both of which are undesirable.

It can be seen that the inflexible exchange rate mechanism is not conducive to the stable development of the economies of various countries. Therefore, for the sake of their own interests, countries have an intrinsic incentive to break through the fixed exchange rate system under the Bretton Woods system.

1. The establishment of a system of pegging and fixing the exchange rate to the US dollar has put an end to the chaotic international financial order and created favorable external conditions for international expansion and world economic growth.

2. As a reserve currency and an international means of repayment, the US dollar has made up for the shortcomings, increased global purchasing power, and promoted international and transnational investment.

3. If there is too much supply of US dollars, there is no guarantee that all of them can be converted**, and if the supply is insufficient, the means of international settlement are insufficient, which is the Triffin dilemma.

4. The solvency of the US dollar and the confidence in the US dollar constitute a contradiction, which is manifested in the contradiction between the status of the US dollar's international currency reserve and the international solvency, the asymmetry of policy coordination between reserve currency issuers and non-reserve currency issuers, and the dilemma between internal and external objectives under the fixed exchange rate system.