Bretton Woods system Flashcards
Question 2
What is the Bretton Woods System?
The Bretton Woods system was a monetary management (est. 1944) aimed to stabilize international economic, commercial relations. It had a trade and financial aspect.
basic principles of trade est.
advocated for free trade, reduced barriers, and promoted multilateral trade agreements
basic principles of finance est.
pegged currencies to the U.S. dollar, which was convertible to gold at a fixed rate, ensuring stability in exchange rates.
What is the IMF? (International Monetary Fund)
Created to oversee the international monetary system, providing financial assistance to countries facing balance of payment problems and promoting exchange rate stability.
What is the World Bank?
Formed by the International Bank for Reconstruction and Development and the International Development Association, it is focused on providing financial and technical assistance to developing countries for development projects and economic advancements.
What is the GATT? (General Agreement on Tariffs and Trade)
Aimed to promote international trade by reducing tariffs and other barriers to trade through negotiation rounds among member countries.
In 1 sentence, what new system replaced the collapsed financial Bretton Woods system?
The replacement was a Floating Exchange Rate System where currency values were determined by market forces rather than fixed exchange rates.
When was the WTO established?
1995
What does the WTO do?
It oversees global trade agreements, settles trade disputes between member nations, and facilitate negotiations on further liberalizing trade.
What is the “Washington Consensus” on international economic issues and development strategy?
The Washington Consensus was a set of neoliberal economic policies advocated by Washington-based institutions like the IMF and World Bank. It emphasized policies such as free markets, privatization, deregulation, and fiscal austerity as the path to economic development.
What is the “Beijing Consensus” on international economic issues and development strategy?
The Beijing Consensus emerged as an alternative development model proposed by China. It emphasizes state-led development, a strong role for state-owned enterprises, strategic industrial policies, and gradual market liberalization.
How does the “Beijing Consensus” differ from the “Washington Consensus”?
It differs from the Washington Consensus in its emphasis on state intervention and the prioritization of national development goals over free market principles.
Why is the “Beijing Consensus” sometimes called “neo-mercantilism”?
It’s sometimes called “neo-mercantilism” because of its focus on export-led growth and strategic trade policies reminiscent of historical mercantilist practices.
What is globalization in two sentences?
Globalization is the process of increased interdependence among countries through the exchange of goods, services, information, investment, etc. This interconnectedness of trades is facilitated by advancements in communication, technology, and transportation on a global scale.
What types of arguments are made against the Washington Consensus by the anti-globalization movement?
The anti-globalization movement argues against the Washington Consensus by criticizing its impact on inequality, environmental degradation, loss of cultural identity, and its tendency to prioritize corporate interests over social welfare and democratic governance.
