Question

Describe how the decisions made at the Bretton Woods Conference in 1944 created the framework for postwar US economic and foreign policy.

Answer 1

The Bretton Woods System is an international monetary system occurred in 1944 and established the basic framework for promotion of the post war exchange rate stability and coordinate international monetary policies. The system called for fixed exchange rates against the U.S. dollar. The main goals included to make the gold standard basis for the Bretton Woods international monetary system thus preventing the recurrence of economic nationalism with destructive “beggar- thy-neighbor” policy and also addressing the lack of clear rules of the game plaguing the interwar years. The main decisions were:

- created post war capitalist economic system based on free trade for the growth of world economy and recognition of US as dominant financial leader

- Re-established link among dollar and gold and provide other currencies fixed relations to dollar

- Established two American-dominated financial institutions namely World Bank and international monetary fund

The above decisions targeted to establish a post-war economic order based on notions of consensual decision-making and cooperation in the realm of economic and trade relations