international finance Flashcards
1
Q
Bretton wood fixed to gold $35/ounce 1944-1973.
How it worked?
A
Exchange rates adjusted only when experiencing a ‘fundamental disequilibrium’ (large persistent deficits in balance of payments)
Loans from IMF to cover loss in international reserves
IMF encouraged contractionary monetary policies
Devaluation only if IMF loans were not sufficient
No tools for surplus countries
U.S. could not devalue currency
