14 Questions
What was the aim of the Bretton Woods agreement?
Institutionalizing open economic relations
What was the unique international currency under the Bretton Woods agreement?
US dollar
What did the fixed exchange rates mean under the Bretton Woods agreement?
Each currency had a fixed exchange rate to the US dollar
What was one of the innovations of the Bretton Woods agreement?
Fixed exchange rates became adjustable
Which system was established by the Bretton Woods agreement?
Dollar-gold standard system
What limitations did European countries face in adjusting to payment imbalances under the Bretton Woods agreement?
Interest rates or exchange rates adjustments
What impact did foreign demand for dollars have on the USA under the Bretton Woods agreement?
Allowed the USA to run deficits
Which institutions were created as a result of the Bretton Woods agreement?
International Monetary Fund (IMF) and the World Bank
During which period did the Golden Age of capitalism occur?
1950s to 1970s
What factors contributed to the significant increase in economic growth during the Golden Age of capitalism?
Supply and demand
What were the main characteristics of the Stalinist model of industrialization?
Central planning and prioritizing heavy industry
What were the basic contradictions faced by central planning committees in the Stalinist model?
Lack of accurate information, lack of incentives, and lack of innovation
What factors led to decolonization after WWII?
Lack of resources and political support for suppressing revolts by European countries, emergence of nationalist movements, and international support for independence.
Why were central planning deficiencies and consumer dissatisfaction less relevant during early stages of industrialization?
Basic goals were achieved and the Stalinist model eliminated markets and democratic mechanisms for efficient resource allocation.
Study Notes
- The Bretton Woods agreement established a dollar-gold standard system in which European countries faced limitations in adjusting to payment imbalances through interest rates or exchange rates, leading to the implementation of exchange and capital controls.
- The system was not symmetrical as the USA could run deficits due to foreign demand for dollars, impacting monetary policy of other countries.
- The Bretton Woods agreement led to the creation of new monetary and credit institutions such as the International Monetary Fund (IMF) and the World Bank, aiming to maintain stable exchange rates and foster development respectively.
- During the Golden Age of capitalism from the 1950s to 1970s, there was a significant increase in economic growth and convergence among OECD countries, spread of industrialization to poor regions, and growth factors including supply and demand.
- The Stalinist model of industrialization involved central planning, prioritizing heavy industry, elimination of markets and democratic mechanisms, and resulting in inefficiencies and waste of resources.
- Central planning committees faced basic contradictions such as lack of accurate information, lack of incentives, and lack of innovation, leading to dysfunctions and inefficiencies.
- Decolonization process after WWII led to independence for one-third of the world population, driven by nationalist movements and international support, affecting main regions of Africa, Asia, and the Middle East.
- Factors leading to decolonization included European countries' lack of resources and political support to suppress far-away revolts, and the emergence of nationalist movements and international support for independence.
- Central planning deficiencies and consumer dissatisfaction were less relevant during early stages of industrialization, but became significant issues as basic goals were achieved and the Stalinist model eliminated markets and democratic mechanisms for efficient resource allocation.
Explore the Bretton Woods agreement, the Golden Age of capitalism, central planning economies, decolonisation, and the Third World in this lesson. Delve into the rules of the international monetary system and the aim of institutionalizing open economic relations during 1944-1971.
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