The main and main objective of the agreement was the establishment of a monetary system that was less rigid than the gold standard, but as stable as the gold standard. The Bretton Woods Agreement was concluded in 1944 at a summit in New Hampshire, USA, on a website of the same name. The agreement was reached by 730 delegates representing the 44 allied nations who participated in the summit. Delegates, as part of the agreement, use gold standard gold In the simplest terms, the gold standard uses a system to understand the value of the currency, and this means that a currency is compared to how much it is worth in gold and at what price it can be exchanged for gold. to establish a fixed exchange rate. The Bretton Woods system was put in place as a more stable replacement for the gold standard under which all currencies were converted to gold. Under the new agreement, the dollar was the standard for international transactions, which were valued at one ounce of gold. The fact that the United States held a large portion of the world`s gold reserves allowed the dollar to play its new role as a standard currency on which the stock markets were based. 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 their raw materials, except coal. The British had no choice but to ask for help. In 1945, the United States agreed on a $3.8 billion loan. In exchange, tired British officials promised to negotiate the deal. The collapse of the Bretton Woods system is the subject of intense debate. There are many theories as to why it did this, from the continued pressure of Fiat`s money to maintaining attachment to gold, to budget deficit problems, to the Vietnam War, to marginal tax rates. The fundamental point of the agreement is that the United States has experienced a growing trade deficit and has ultimately been unable to establish credibility in limiting that deficit. The result would be an analysis of the economics of credibility as a separate area and the emphasis on “open” macroeconomic models such as the Mundell-Fleming model. As chief international economist at the U.S. Treasury in 1942/44, Harry Dexter White designed the United States.