The Bretton Woods Institutions Vs the Developing Economies: Is it Time for Change?

By

ACKNOWLEDGEMENTS

I would like to take this chance for thanking my research facilitator, friends and family for support they provide, their belief in me as well as the guidance they provided me, without that I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this dissertation stand for my individual work without any aid, & this dissertation has not been submitted for any examination at academic as well as professional level previously. It also represents my own views & not essentially the ones associated with university.

Signed __________________ Date _________________

TABLE OF CONTENTS

ACKNOWLEDGEMENTSii

DECLARATIONiii

CHAPTER 1: INTRODUCTION1

Background Information1

Set up of the Bretton Woods System2

Working of the Bretton Woods System3

Changes in the Bretton Woods System4

Financial Crisis4

Aim of the Study5

Objective of the Study5

Significance of the Study6

CHAPTER 2: LITERATURE REVIEW7

Differences in Macroeconomic variables during and after Bretton Woods7

Demise of Bretton Woods8

Developing Countries8

China8

India9

Demands from Different Economies of World10

CHAPTER 3: METHODOLOGY13

Introduction13

Justification of Research Method13

Research design14

Method of Analysis14

Data Collection Techniques15

BIBLIOGRAPHY16

CHAPTER 1: INTRODUCTION

Background Information

The construction and implementation of the Bretton Woods monetary system represented the most comprehensive attempt in history to establish stability in what would become, by design, an ever more integrated world economy. Although efforts to design the system started as early as 1940, it wasn't until July of 1944 that representatives from forty-four countries converged on the pristine hills of New Hampshire to hammer out the agreement. Though the visions of the participants may have differed, perhaps significantly, each sought to lay the foundation for a system which would provide exchange rate stability, facilitate full currency convertibility, provide the means for smooth balance of payments adjustment, and foster the opening of world markets. In what was, arguably, an unprecedented level of cooperation and coordination, delegates from participating countries constructed and ratified a set of agreements which would define postwar monetary and trade agreements, thus shaping the course of world economic history for decades to come. The motivation for this cooperation, discussed more thoroughly below was grounded in the failed attempts and perceived mistakes made in this realm in the past.

The study will focus on the years prior to the construction of the system in order to understand the urgency which the delegates at Bretton Woods brought to their task. From there it will be useful to briefly consider how the two main architects of the plan - John Maynard Keynes and Harry Dexter White - sought to avoid the mistakes of the past and usher in a period in which institutionalized coordination and cooperation in world monetary and trade arrangements would be the norm.

Set up of the Bretton Woods System

Block (1977) focuses his analysis of the construction phase of the Bretton Woods system on the domestic (United States) dynamics surrounding this period. As a result, his analysis avoids, to a greater or lesser degree, the trap outlined above. Within the context of his analysis, the debates and conflicts surrounding the construction of the postwar monetary ...