S/E/84. International Financial Systems: From Bretton Woods to the Present Day Economic World

The international monetary system has gone through many incarnations over the past century. In the broadest terms, the system has moved from a fixed exchange rate based on the gold standard (ending in 1914 with the start of World War 1), through a period with no universal system, except a brief return to the gold standard, and a sustained period of floating rates (1914-1945). It is after this date that the Bretton Woods pegged exchange rate system (1945-73) dominated international finance, before breaking down and culminating in the managed floating system of recent years. This paper shall analyse the establishment of the Bretton Woods system, its initial operation and subsequent fall, and the transformation into the more liberal financial system that exists today, concomitant with the problems of the modern economic world.