Chapter 2 - Chapter 2 Bretton Woods Meeting: creates basis...

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Chapter 2 Bretton Woods Meeting: creates basis for economic cooperation among 44 nations -the 1 st example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states -preparing to rebuild the international economic system as WW2 was still going, 730 delegates from all 44 nations gathered at Mount Washington Hotel in Bretton Woods, New Hampshire -they established the World Bank and the IMF. World Bank: institutional goal of reducing poverty and the improvement of living standards by promoting sustainable growth and investment in people -created by the Bretton Woods agreement -has 5 institutions each of which performs the following services: *lending money to the govt of developing nations *providing assistance to govts for developmental projects to the poorest developing countries *lending directly to the private sector *providing investors with investment guarantees against “noncommercial risk” *promoting increased flows of international investment Marshall Plan: to assist in rebuilding Europe. Created overseas demand. -was the primary plan of the US for rebuilding and creating a stronger foundation for the allied countries of Europe, and repelling communism after WW2. -has long been seen as one of the 1 st elements of European integration, as it erased tariff trade barriers and set up institutions to coordinate the economy on a continental level I MF: created to assist nations in becoming and remaining economically viable -created to overcome particular market barriers that plague international trading before WW2 -originally 29 countries, now 184 -objectives: *stabilization of foreign exchange rates *establishment on freely convertible currencies to facilitate the expansion and balanced growth of international trade - special drawing rights (SDRs): a means of monetary measurement that represents an average base of value derived from the value of a group of major currencies. Known as “paper gold” created to cope with universally floating exchange rates GATT: paved the way for the 1 st effective worldwide tariff agreement basic elements: *trade shall be conducted on a nondiscriminatory basis *protection shall be afforded domestic industries through customs tariffs, not through such commercial measures as import quotas *consultation shall be the primary method used to solve global trade problems eliminating barriers to international trade (Uruguay Round):
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Chapter 2 - Chapter 2 Bretton Woods Meeting: creates basis...

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