Throughout history the international monetary system has undergone profound changes and constant evolution. During the sixteenth to the mid-eighteenth century Mercantilism was the predominant system in which power and increased wealth mostly gold, silver and raw materials from the colonies. It was a period in which the "wealth was power, and power was wealth."
Followed mercantilism began the period of industrialization or the British Industrial Revolution. This period was characterized because Britain was the hegemonic, the first country to industrialize. In the early nineteenth century Britain had already surpassed the gains elsewhere, production and efficiency.
Bretton Woods Conference in 1944 and the creation of the World Bank (WB), the International Monetary Fund (IMF), and the World Trade Organization (WTO) had changed the world’s economic system. The establishment of these organizations was the first effort by several countries to build an economic stability system not only for their national economies but also intended for the international markets. Nevertheless they had some successes in their goals, and the spread of globalization was one of the most notorious results, the conditions in the economic, political and social arena has changed vastly throughout the years, that the work of these organizations has become very controversial, and several people blames them for the way in which the present monetary system performs.
The Globalization process, combined with the impact of the liberal economic ideas has outlined the way in which the international monetary system is these days. Since its early stages, the occurrence of Globalization has been sustained by liberals’ ideals from those like John Locke, Adam Smith, and ...
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...veloping countries that in their illusion to join the international market in order to growth and develop, has resulted in a devastating outcome that have left many countries in worst condition as they were before. The increase in unemployment rates, poverty levels, and the increment of social conflicts, had been some of the results left by Globalization in many of the developing countries.
Works Cited
• Cohn, Theodore H. Global Political Economy: Theory and Practice. New York: Pearson Longman, 2008. Print.
• Proffessor Krystel Ramdathsingh, September 12-16, 2011 Class materials and power points
• http://www.imf.org/external/np/exr/key/global.htm
• http://plato.stanford.edu/entries/globalization
• Proffessor Krystel Ramdathsingh; Managing the Global Economy; Power Point Presentation corresponding to Week two; INR 3703; Web. Accessed on October 6, 2011
The July 1944 United Nations Financial and Monetary Conference, known as the Bretton Woods Conference, who created the International Monetary Fund (IMF) and the forerunner of the World Bank, the International Bank for Reconstruction and Development (IBRD). The “Bretton Woods system” was bolstered in 1947 with the addition of the General Agreements on Tariffs and Trade (GATT), forerunner of the World Trade
In a similar economic revolution, the colonies out grew their mercantile relationship with England and developed their own expanding capitalist system. The idea of a set amount of wealth in the world and that if one were to become wealthy, he or she had to take from someone who is already wealthy, is basically what mercantilism means.
The discernments provided in this book by a distinguished ‘insider’ is manna for economists, investment banks, governments of both developing and developed countries and just about anybody who wants to learn and understand economic development, the politics of international business and globalization, and public policy formulation with regards to globalization and liberalization. The author provides a holistic view of all aspects of globalization – the good, the bad, and the ugly. International organizations and business practitioners in particular will be wise to glean valuable insights from this book.
In his book, The Globalization Paradox: Democracy and the Future of the World Economy, Dani Rodrik presents a critique of globalization advocates who aspire for the further proliferation of free trade, full liberalization of foreign trade, and unrestricted capital movement across borders. He argues that despite the increasing living standards brought by engaging with the world economy, the social side effects of this engagement are incredibly distressing. , Newly-generated problems such as increased unemployment and the global consequences of the recent economic recessions challenge the idealization
Eichengreen, Barry. Globalizing Capital: A History of the International Monetary System. Princeton, NJ: Princeton University Press, 1996.
The end of the World War II marked the beginning of a new era for the world economy. The Bretton Woods System refers to an agreement made at an international conference between 44 nations in 1944 at Bretton Woods, New Hampshire, United States of America (hereby U.S.) on the 22nd of July 1944. It was aimed at maintaining stability in the monetary system in the post World War II period. “In an effort to free international trade and fund postwar reconstruction the member states agreed to fix their exchange rates by tying their currencies to the U.S. dollar.” The fundamental of this system was liberalizing trade policy and promoting free trade. The U.S. dollar was linked to gold as a show of its dependability in the eyes of the rest of the world, $35 equaled 1 ounce of gold. They followed an adjustable fixed exchange rate (1% band). It set up the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which is a part of the World Bank today. Member nations monetary contributions to the setting up of these institutes determined their number of votes as well as their economic prowess
The International Monetary Fund (IMF) is an international organization was set up in 1945 after World War II. The whole world had experienced severely destruction during the period World War One and World War Two, each state need the restorative processes and a good platform to recover its inherent ability and make their citizens get rid of poverty, hence economy problem it was the first problem that states should be concerned.
The theme of this essay outlines two things. One, the key elements of Bretton woods system and second, the characterisation of Bretton woods system by Ruggie as ‘embedded liberalism’, and how far he succeeds in it. The Bretton woods system is widely referred to the international monetary regime, which prevailed from the end of the World War 2 until the early 1970s. After the end of the World War 2, the need of international monetary framework to boost trade and economic; growth and stability, was important. Taking its name from the site of the 1944 conference, attended by all forty-four allied nations; the Bretton Woods system consisted of four key elements. First, to make a system in which each member nation has to fix or peg his currency exchange rate against the gold or U.S. dollar, as the key currency. Secondly, the free exchange of currencies between countries at the established and fixed exchange rate; plus or minus a one-percent margin. Thirdly, to create an institutional forum, so-called International Monetary Fund (IMF), for the international co-operation on money matters: to set up, stabilize, and watch over exchange rates. Fourth, to remove all the existing exchange controls limiting (protectionism) policies by the members, on the use of its currency for international trade. In practice the first scheme, as well as its later development and final demise, were directly dependent on the preferences and policies of its most powerful member, the United States. According to John Gerard Ruggie, 1982, this Bretton woods system of monetary co-operation represented the type of liberalism which characterise “domestic social economic stability along with a liberal trading order.” He referred this system as ‘embed...
Gilpin, Robert. Global Political Economy: Understanding the International Economic Order. Princeton: Princeton University Press, 2001. Print.
Balaam, David. Introduction to International Political Economy, Upper Saddle River, New Jersey, Pearson Education, 2005.
The structure of global economy is an evidently dependent structure, depending on several aspects of the government to power its economy and keep it running reliably. The cycle goes on between the government, firms, product markets, resource markets and finally households. Looking at the government, they provide public goods and services to the firms and households and welcome taxes from both aspects. Differently, they make payments to the resource markets, receiving resources in return, and provide prices for the product markets receiving good and services in return. Moving to the firms, they offer wages, interests, rents and profits to resource markets benefiting of their resources production in return and goods and services to product...
the effect that the work of the IMF and the World Bank have had on the
Established in 1944 and taking its name from the New Hampshire town where the agreements were drawn up, the Bretton Woods conference was a gathering of finance ministers from Allied countries following the end of the Second World War. Under American leadership, the group met to discuss the failings of World War I’s Treaty of Versailles and the creation of a new international monetary system which could fund post war reconstruction, economic stability and facilitate international trade. This conference led to the establishment of two of the most important post war economic institutions, the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, now known as the World Bank (An introduction to the WTO and GATT, pp. 42, 2003). Originally, the architects of the international trade system in the post war ...
This book review is divided into four parts, which are (i) Introduction, (ii) Chapter Summary, (iii) Review proper, and (iv) Concluding words. In the chapter summary, I just explained simply the gist of the chapters in 4 - 5 sentences. While in review proper, I quoted from the book the sentence / paragraph that I agreed in. lastly, you will see the things that I have agreed in to. Lastly, in the concluding part, I just recommended the book to the people who are in globalization and economic development.
The International Monetary Fund and the World Bank were created as a result of the Bretton Woods Conference. Both provide assistance to countries suffering economically. While the IMF is a cooperative institution that aims to create an organized global system of payments and receipts, the World Bank is an institution that aims to help developing countries (Driscoll 1). Both play a part in the economies of struggling nations with the goal of reducing their burden and helping them to survive in the global economic system. Unfortunately, in many cases their practices within developing nations have been seen to create more harm than good. This is possibly because both institutions use a one size fits all approach when aiding countries rather than gaining a deep understanding of each country they are involved in and catering their approach as a result. In this paper I will examine the practices of the IMF and World Bank in developing nations that have led to failure and the effects the policies had on these countries.