The Architects Of The Bretton Woods Agreement Wanted To Avoid High Unemployment

In the event of a current account deficit, Fund members, if they do not have reserves, could borrow foreign currency for amounts determined by the level of their quota. In other words, the greater the country`s contribution, the greater the amount of money it could borrow from the IMF. In addition, the IMF was in Washington, D.C. and mainly occupied by American economists. She regularly exchanged staff with the U.S. Treasury. When the IMF took office in 1946, President Harry S. Truman White was appointed the first Executive Director of the United States. In the absence of an Assistant Managing Director, Mr. White has at times served as Managing Director and played a very influential role in the first year of the IMF. However, the increasing state intervention in the national economy has led to a sense of isolationism that has had a profoundly negative impact on the international economy. The priority of national objectives, the independence of national action in the interwar period and the inability to recognize that these national objectives could not be achieved without any form of international cooperation – all this led to a policy of “begging-neighbours” such as high tariffs, competitive devaluations that contributed to the collapse of the international monetary system based on gold, political instability and international war. The lesson was learned, as harry Dexter White, the principal architect of the new Bretton Woods dealer, said: Nazi Germany also worked with a block of controlled nations until 1940.

Germany forced the surplus trading partners to spend this surplus on products imported from Germany. [8] Thus, Britain survived by retaining the surpluses of the sterling nation in its banking system, and Germany survived by forcing its trading partners to buy its own products. The United States feared that a sudden decline in war spending would bring the nation back into unemployment in the 1930s, and therefore wanted sterling nations and all European nations to be able to import from the United States, which is why the United States supported free trade and the international convertibility of currencies into gold or dollars. [9] The aim of the conference was to avoid the resurgence of closed markets and the economic wars that characterized the 1930s. Thus, the Bretton Woods negotiators agreed on the need for an institutional forum for international monetary cooperation. In 1944, the British economist John Maynard Keynes stressed “the importance of rules to stabilize business expectations” – something he accepted in the Bretton Woods system. The monetary problems of the interwar years were felt to have been considerably aggravated by the absence of an established procedure or procedure or procedure for intergovernmental consultation. A devastated Britain had little choice. Two world wars had destroyed the country`s main industries, which paid for the import of half of the food and almost all of its raw materials except coal.

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