The United States from the World War II as the Strongest Economy in Research Paper

The United States from the World War II as the Strongest preservation in the World - Research Paper ExampleEach of the countries which signed their allegiance to the Bretton Woods indicates its cite of four important factors. This uniformity becomes the cornerstone and the main factor which holds the international economy together. First, all the nations multiform recognize and agree that the interwar period had conclusively demonstrated the disadvantages of unrestrained flexibility of commuting rates (Cohen 4). It ignore be recalled that the Great Depression in the 1930s has become a grim reminder of how be adrift exchange rates discourages trade and investment while increasing the risk of destabilization and competitive depreciation. On the other hand, architects of the Bretton Woods are also reluctant in adopting a permanently icy exchange rate like the 19th-century gold standard. Thus, avoiding both maxims, delegates agree on a pegged rate or adjustable peg currency regime or a par value system (Cohen 5). Thus, each country is obligated to choose a par value in their national currency and intervene in order to maintain the exchange rate within 1% above or below the planned rate. Secondly, all nations hold that if exchange rates were not to float freely, states would also require assurance of an nice supply of monetary reserves (Cohen 6). The financial hegemony held by the United States during the period significantly affected the concluding decision a system of subscriptions and quotas embedded in the IMF, which itself was to be no more than a fixed pool of national currencies and gold subscribed by each country.