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A reserve currency is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international transactions, international investments and all aspects of the global economy. It is often considered a hard currency or safe-haven currency.
The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 allied nations at the Mount Washington Hotel, in Bretton Woods, New Hampshire, United States, to regulate the international monetary and financial order after the conclusion of World War II.
The Bretton Woods system of monetary management established the rules for commercial relations among the United States, Canada, Western European countries, and Australia among 44 other countries after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold. It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to nations with balance of payments deficits.
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The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold.
Barry Julian Eichengreen is an American economist and economic historian who holds the title of George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley, where he has taught since 1987. Eichengreen currently serves as a research associate at the National Bureau of Economic Research and as a Research Fellow at the Centre for Economic Policy Research.
Monetary hegemony is an economic and political concept in which a single state has decisive influence over the functions of the international monetary system. A monetary hegemon would need:
Robert, Baron Triffin was a Belgian-American economist best known for his critique of the Bretton Woods system of fixed currency exchange rates. His critique became known later as Triffin's dilemma.
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A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another measure of value, such as gold.
An international monetary system is a set of internationally agreed rules, conventions and supporting institutions that facilitate international trade, cross border investment and generally the reallocation of capital between states that have different currencies. It should provide means of payment acceptable to buyers and sellers of different nationalities, including deferred payment. To operate successfully, it needs to inspire confidence, to provide sufficient liquidity for fluctuating levels of trade, and to provide means by which global imbalances can be corrected. The system can grow organically as the collective result of numerous individual agreements between international economic factors spread over several decades. Alternatively, it can arise from a single architectural vision, as happened at Bretton Woods in 1944.
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The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order is a 2013 non-fiction book by Dr. Benn Steil.
Margaret Garritsen de Vries (1922-2009) was an economist and historian known for her work for the International Monetary Fund.
Michael David Bordo is a Canadian and American economist, currently Board of Governors Professor of Economics and Distinguished Professor of Economics at Rutgers University. He is a research associate at the National Bureau of Economic Research as well as a Distinguished Visiting Fellow at the Hoover Institution at Stanford University. He is the third most influential economic historian worldwide according to the RePEc/IDEAS rankings. He was a student of Milton Friedman and has co-authored numerous books and articles with Anna Schwartz.
Nazih Deif was an Egyptian economist and academic. He worked at the International Monetary Fund (IMF), other leading finance institutions and Cairo University. He served as the minister of planning and minister of treasury in the 1960s during the presidency of Gamal Abdel Nasser.
The United States was a founding member of the International Monetary Fund (IMF), having hosted the other countries at the IMF’s founding conference, the Bretton Woods Conference, in 1944. The US delegation played an integral role in the establishment of the basic tenets of the IMF and maintains a large presence in the workings of the organization.
References
- ↑ "Press Release: Lagarde Appoints Historians to Chronicle "Defining Moments" in Fund's History". International Monetary Fund.
- ↑ "International Monetary Cooperation Since Bretton Woods". International Monetary Fund.
- ↑ Boughton, James. Silent Revolution: The IMF 1979–1989 (PDF). Oxford: Oxford University Press.
- ↑ Cooper, Richard N. "International Monetary Cooperation Since Bretton Woods". Foreign Affairs .
- ↑ Schwartz, Anna J. (1996). "International Monetary Cooperation since Bretton Woods". The Journal of Economic History .