The Bretton Woods Agreement

International Business

The Bretton Woods Agreement

June 2, 2014

Key Term and Why it Interest Me

I chose this subject for this week’s discussion board forum because I like historical things and this topic had a historical concept for today’s business world. As someone who wants to pursue a higher degree, we must strive to understand the “why” of things and this agreement that lasted for over 27 years during some of our most critical times in our nation’s history and how it impacted the world during its lifetime.

Explanation of the Key Term

During and after World War II, many nations who had not only suffered great loss of life but also had spent a considerable amount of money to prosecute the war and build up their defense had to figure out a way to help build up those countries who would be fighting economic security. In 1944, 44 nations met to outline a plan that would help see them through and the plan became known as The Bretton Woods Agreement, named after the location of the meeting: Bretton Woods, New Hampshire. Out of this agreement, three major events unfolded to become what we now know of as 1) establishment of a fixed exchange system, 2) the International Monetary Fund, and 3) the World Bank (Satterlee, 2009, p 157).

While the agreement has sound principles, over the defining years, nation’s agendas changed along with their fiscal policy which led the dissolution of the agreement, there have been repeated calls over the last 10 years that maybe it’s time that nations’ of the world take another stab at creating a new structure similar to the Bretton Woods Agreement.

Major Article Summary

I chose my article the Legacy of Bretton Woods by Chrisella Sagers because I thought the author gave a great historical recap of the Bretton Woods but also suggested that maybe with the world fighting terrorism, Russia exerting its power and might throughout the region and China’s emergent as the new financial superpower that a new system be...