Bretton Woods and the World Debt Crisis
1. The Bretton Woods institutions were developed near the end of W.W. II to help countries that were greatly affected by the war. The three institutions that were created in New Hampshire by the economic leaders of various countries were: The International Monetary Fund, The World Bank, and The General Agreement on Tariffs and Trade, which later developed into the World Trade Organization. The I.M.F was created so that countries could exchange their currency for other currencies with little restriction on the trade. This organization also helps countries that are facing high debts by giving them loans. The World Bank was established to help European countries destroyed by the war. The only country to receive any money for the war however was Holland. After that, The World Bank focused mainly on giving out loans similar to the I.M.F. The GATT was created with the idea that countries could negotiate their policy on trade. They wanted to create an institution that would regulate free trade between countries. Some countries did not like the idea that an organization could control what they do with other countries. Consequently in 1995 the World Trade Organization was established. The organization can judge if member countries are not
4. The organizations that were lending out all this money responded by extending the scheduled repayment of the debtor countries and by giving out more short-term loans to nations that were in a financial crisis. This meant however that countries had to change how they were spending their money. If countries did not agree to manage their money better, meaning manage their money like the wealthy nations do, the I.M.F or World Bank would not agree did give them loans and make them pay what they owe these banks. This means that the organizations like the I.M.F and World Bank could basically control the economy of these poorer nations. getting fair trade policies by other Countries. 2. The three major factors that created the debt crisis were; the change in what we call money, the amount of money given to poor countries by the organizations like the I.M.F and World Bank, and the oil boom of the 1970's which pressured financial organizations to invest the money created from that boom. The Bretton Woods meeting established the idea that countries would exchange their currency for U.S dollars at a fixed rate. In return, the Americans would exchange money for gold that they at Fort Knox again at a fixed rate. For various reasons however, in the 1960's the United States was creating an amount of money that they did not have in gold. Consequently they had to declare that they could no longer exchange U.S dollars for gold. This meant that money could no
Some common words found in the essay are:
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Approximate Word count = 982
Approximate Pages = 4 (250 words per page double spaced)
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