Bretten Wood System Final

8/12/2019 Bretten Wood System Final

1/19


2/19

GROUP MEMBERS

SR.NO NAME ROLL NO

1. RAJANI RAJAPPAN 84

2. SONIYA MORE 85

3. PRAVIN KOYANDE 86

4. ROHAN TRIVEDI 88

5. SHRADHA CHINDARKAR 89


3/19

THE BRETTON WOOD SYSTEM

INTRODUCTION

The de!e""#$% $& '()*+", &$$ed /0 1%$2he! $!d 1! h1d 31"20 d#4#%#"hed

5$44e!5#1 2!1de, 2he #%2e!%12#$%1 e65h1%7e $& 58!!e%5#e" 1%d 5!$"" /$!de! e%d#%7 1%d

/$!!$#%7. Wh12 1" e&2 1" $%0 2he 4e4$!#e" $& h12 2h12 "0"2e4 h1d $%5e /ee%.

Re3#31 $& 2he "0"2e4 1" %e5e""1!0 1%d 2he !e5$%"2!852#$% $& 2he $"2 1! %1%5#1

"0"2e4 /e71% #2h 2he B!e22$% W$$d+" 17!ee4e%2 2h12 e4e!7ed &!$4 2he #%2e!%12#$%1

4$%e21!0 1%d %1%5#1 5$%&e!e%5e $& 2he 8%#2ed 1%d 1""$5#12ed %12#$%" #% J80 '(99 12

B!e22$% W$$d", Ne H14"h#!e.

The!e 1" 1 7e%e!1 17!ee4e%2 2h12 !e"2$!#%7 2he 7$d "21%d1!d 1" $82 $&

:8e"2#$%, 2h12 e65h1%7e !12e" "h$8d /1"#510 /e "21/e, 2h12 7$3e!%4e%2 %eeded 155e"" 2$

5!ed#2" #% 5$%3e!2#/e 58!!e%5#e" #& 2he0 e!e 2$ "21/##"e e65h1%7e !12e" 1%d 2he

7$3e!%4e%2 "h$8d 41;e 41 2h#" 2e%e2 !8ed $82 1 !e28!% 2$ 2he 7$d "21%d1!d?


4/19

F!ee &$12#%7 e65h1%7e !12e" 5$8d %$2 $!;. The#! #%e&&e52#3e%e"" h1d /ee%

de4$%"2!12ed #% '(@*+" 1%d '()*+". B82 2he e62!e4e" $& /$2h e!41%e%20 ed

1%d &!ee-&$12#%7 !12e" "h$8d /e 13$#ded.

A 4$%e21!0 "0"2e4 1" %eeded 2h12 $8d !e5$7%#e 2he e65h1%7e !12e" e!e

/$2h 1 %12#$%1 1%d #%2e!%12#$%1 5$%5e!%.

Th#" 17!ee4e%2 e"21/#"hed 1 d$1! /1"ed I%2e!%12#$%1 M$%e21!0 S0"2e4 1%d 5!e12ed

2$ %e #%"2#282#$%"=

'. The I%2e!%12#$%1 M$%e21!0 F8%d>IMF?

@. The I%2e!%12#$%1 B1%; &$! Re5$%"2!852#$% 1%d De3e$4e%2 12e! 514e 2$

/e ;%$% 1" 2he W$!d B1%;.

The /1"#5 !$e $& 2he IMF $8d /e 2$ he 5$8%2!#e" #2h /11%5e $& 104e%2 1%d

e65h1%7e !12e !$/e4" h#e W$!d B1%; $8d he 5$8%2!#e" #2h $"2-1!

Re5$%"2!852#$% 1%d 7e%e!1 e5$%$4#5 de3e$4e%2.

The /1"#5 8!$"e $& 2h#" %e 4$%e21!0 "0"2e4 1" 2$ &15##212e 2he e61%"#$% $&

$!d 2!1de 1%d 2$ 8"e 2he US d$1!" 1" 1 "21%d1!d $& 318e. Th#" B!e22$% W$$d"

A7!ee4e%2 !$d85ed ) P!$$"#2#$%"=

>#? The "21/e e65h1%7e !12e" 8%de! 2he 7$d "21%d1!d /e&$!e W$!d W1! I

e!e de"#!1/e /82 2he!e e!e 5e!21#% 5$%d#2#$%" 2$ 41;e 1d###? The 5$4e6 %e2$!; $& 7$3e!%4e%2 5$%2!$" d8!#%7 '()'-'(9

d#"5$8!17ed 2he e61%"#$% $& $!d 2!1de 1%d #%3e"24e%2. H$e3e!,

2he!e e!e 5e!21#% 5$%d#2#$%" h#5h !e:8#!ed 7$3e!%4e%2 5$%2!$"

$3e! I%2e!%12#$%1 2!1de 1%d 104e%2".


5/19

The B!e22$% W$$d" A7!ee4e%2 15ed 41##? e15h 5$8%2!0 1" $/#712ed 2$ de%e #2" 4$%e21!0 8%#2 #% 2e!4" $& 7$d $!

d$1!". Wh#e $2he! 58!!e%5#e" e!e !e:8#!ed 2$ e65h1%7e 2he#! 58!!e%5#e"

&$! 7$d, US D$1! !e41#%ed 5$%3e!2#/e #%2$ 7$d 12 ) e! $8%5e. Th8",

e15h 5$8%2!0 e"21/#"hed 1! !12e" $& e65h1%7e /e2ee% #2" 58!!e%50 1%d

2he 58!!e%5#e" $& 1 $2he! 5$8%2!#e".

Th8", 2he 41#% $#%2" $& 2he $"2-1! "0"2e4 e3$3#%7 &!$4 2he B!e22$% W$$d"

5$%&e!e%5e e!e 1" &$$"=

'. A %e #%"2#282#$%, 2he I%2e!%12#$%1 M$%e21!0 F8%d >IMF?, $8d /e e"21/#"hed

#% W1"h#%72$% DC. I2" 8!$"e $8d /e 2$ e%d &$!e#7% e65h1%7e 2$ 1%0 4e4/e!

h$"e "80 2$ &$!e#7% e65h1%7e h1d /e5$4e "51!e. Th#" e%d#%7 $8d %$2 /e

182$412#5 /82 $8d /e 5$%d#2#$%1 $% 2he 4e4/e!+" 8!"8#2 $& e5$%$4#5 $#5#e"

5$%"#"2e%2 #2h 2he $2he! $#%2" $& 2he 17!ee4e%2, 1 de2e!4#%12#$% 2h12 $8d /e

41de /0 IMF.

@. The US d$1! >1%d, de &152$!, 2he B!#2#"h $8%d? $8d /e de"#7%12ed 1" !e"e!3e

58!!e%5#e" 1%d $2he! %12#$%" $8d 41#%21#% 2he#! &$!e#7% e65h1%7e !e"e!3e"

!#%5#10 #% 2he &$!4 $& d$1!" $! $8%d".

). E15h F8%d 4e4/e! $8d e"21/#"h 1 1! 318e $& #2" 58!!e%50 1%d 41#%21#% 2he

e65h1%7e !12e &$! #2" 58!!e%50 #2h#% $%e e!5e%2 $& 1! 318e. I% !152#5e "#%5e

2he !#%5#e !e"e!3e 58!!e%50 $8d /e 2he US d$1!", 2h#" 4e1%2 2h12 $2he!

5$8%2!#e" $8d e7 2he#! 58!!e%5#e" 2$ 2he US d$1!, 1%d, $%5e 5$%3e!2#/##20 1"

!e"2$!ed, $8d /80 1%d "e US d$1!" 2$ ;ee 41!;e2 e65h1%7e !12e" #2h#% 2he

' /1%d 1!$8%d 1! 318e. The U%#2ed S212e", 4e1%h#e, "e1!12e0 17!eed 2$


6/19

/80 7$d &!$4 1%d "e 7$d 2$ &$!e#7% $ 4$%e21!0 182h$!#2#e" 12 US) e!

$8%5e "e22e4e%2 $& #%2e!%12#$%1 %1%5#1 2!1%"152#$%". The US d$1!" e!e 2h8"

e77ed 2$ 7$d 1%d 1%0 $2he! 58!!e%50 e77ed 2$ 2he d$1! 1" #%d#!e520 e77ed

2$ 7$d 12 1 !#5e de2e!4#%ed /0 #2" 1! 318e.

9. A F8%d Me4/e! 5$8d 5h1%7e #2" 1! 318e $%0 #2h &8%d 1!$31 1%d $%0 #&

2he 5$8%2!0+" /11%5e $& 104e%2 1" #% &8%d14e%21 d#"e:8##/!#84. The

4e1%#%7 $& &8%d14e%21 d#"e:8##/!#84 1" e&2 8%"e5#ed /82 e3e!0$%e

8%de!"2$$d 2h12 1! 318e 5h1%7e" e!e %$2 2$ /e 8"ed 1" 1 4122e! $& 5$8!"e 2$

1d


7/19

The "21/##20 $& e65h1%7e !12e" !e4$3ed 1 7!e12 de1 $& 8%5e!21#%20 &!$4

#%2e!%12#$%1 2!1de 1%d /8"#%e"" 2!1%"152#$%" 2h8" he#%7 2he 5$8%2!#e" 2$ 7!$. A"$ 2he

$!;#%7 $& 2he "0"2e4 #4$"ed 2$ 1 de7!ee $& d#"5##%e $% 2he e5$%$4#5 1%d %1%5#1

$#5#e" $& 2he 1!2#5#12#%7 %12#$%". D8!#%7 2he '(*+" 1%d '(*+", 2he IMF 1"$

e61%ded 1%d #4!$3ed #2" $e!12#$% 2$ !e"e!3e 2he B!e22$% W$$d" S0"2e4.

The "0"2e4, h$e3e!, "8&&e!ed &!$4 1 %84/e! $& #%he!e%2 "2!8528!1 !$/e4". I%

2he !"2 15e, 2he!e 1" 485h #4/11%5e #% 2he !$e" 1%d !e"$%"#/##2#e" $& 2he "8!8"

1%d de#2" %12#$%". C$8%2!#e" #2h e!"#"2e%2 de#2" #% 2he#! /11%5e $& 104e%2" h1d 2$

8%de!7$ 2#7h2 1%d "2!#%7e%2 e5$%$4#5 $#50 4e1"8!e" #& 2he0 1%2ed 2$ 21;e he &!$4

IMF 1%d "2$ 2he d!1#% $% 2he#! !e"e!3e". H$e3e!, 5$8%2!#e" #2h "8!8" $"#2#$%" #%

2he#! /11%5e" $& 104e%2" e!e %$2 /$8%d /0 "85h #44ed#12e 5$48"#$%". A2h$87h

"8"21#%ed #%5!e1"e" #% 2he#! #%2e!%12#$%1 !e"$8!5e" 4e1%2 2h12 2he0 4#7h2 h13e 2$ 82 8

#2h "$4e #%&12#$%1!0 5$%"e:8e%5e", 2he"e $2#$%" e!e 485h 4$!e !e1"$%1/e 2h1%

2h$"e &$! 2he de#2 %12#$%".

The /1"#5 !$/e4 he!e 1" 2he !#7#d 1!$15h /0 2he IMF 2$ 2he /11%5e $&

104e%2" d#"e:8##/!#1 "#2812#$%. The 5$%2!$3e!"0 41#%0 5e%2!e" $% 2he 5$%d#2#$%1#20

#""8e+ h#5h !e&e!" 2$ 1 "e2 $& !8e" 1%d $#5#e" 2h12 1 4e4/e! 5$8%2!0 #" !e:8#!ed 2$

8!"8e 1" 1 !e-!e:8#"#2e 2$ 8"#%7 IMF+" !e"$8!5e". The"e $#5e" 41#%0 2!0 1%d e%"8!e

2h12 2he 8"e $& !e"$8!5e" /0 5$%5e!%ed 4e4/e!" #" 1!$!#12e 1%d 2e4$!1!0. The IMF

d#"2#%78#"he" /e2ee% 2$ e3e" $& 5$%d#2#$%1#20- $ 5$%d#2#$%1#20 he!e 1 4e4/e!

%eed" &8%d" $%0 &$! 1 "h$!2 e!#$d 1%d h#7h 5$%d#2#$%1#20 he!e 2he 4e4/e! 5$8%2!0

1%2" 1 1!7e 155e"" 2$ 2he F8%d+" !e"$8!5e". Th#" #%3$3e" 2he &$!4812#$% $& 1 &$!41

%1%5#1 !$7!144e 5$%21#%#%7 "e5# 4e1"8!e" de"#7%ed 2$ e#4#%12e 2he 5$8%2!0+"

/11%5e $& 104e%2 d#"e:8##/!#84. U"e $& IMF !e"$8!5e", 8%de! 2he"e 5#!584"21%5e",

!e:8#!e" IMF+" ##%7%e"" 2h12 2he "21/##12#$% !$7!144e #" 1de:812e &$! 2he

15h#e3e4e%2 2$ #2" $/


8/19

THE BRETTON WOODS SYSTEM OF FIXED EXCHANGE RATES

The B!e22$% W$$d" "0"2e4 "$87h2 2$ "e58!e 2he 1d31%217e" $& 2he 7$d "21%d1!d #2h$82

#2" d#"1d31%217e". Th8", 1 5$4!$4#"e 1" "$87h2 /e2ee% 2he $1! 12e!%12#3e" $& e#2he!

&!ee0 &$12#%7 $! #!!e3$51/0 ed !12e"1% 1!!1%7e4e%2 2h12 4#7h2 71#% 2he 1d31%217e"$& /$2h #2h$82 "8&&e!#%7 2he d#"1d31%217e" $& e#2he! h#e !e21#%#%7 2he !#7h2 2$ !e3#"e

58!!e%50 318e" $% $551"#$% 1" 5#!584"21%5e" 1!!1%2ed.

The !8e" $& B!e22$% W$$d", "e2 &$!2h #% 2he 1!2#5e" $& 17!ee4e%2 $& 2he I%2e!%12#$%1

M$%e21!0 F8%d>IMF? 1%d 2he I%2e!%12#$%1 B1%; &$! Re5$%"2!852#$% 1%d De3e$4e%2

>IBRD?, !$3#ded &$! 1 "0"2e4 $& ed e65h1%7e !12e". The !8e" &8!2he! "$87h2 2$

e%5$8!17e 1% $e% "0"2e4 /0 5$44#22#%7 4e4/e!" 2$ 2he 5$%3e!2#/##20 $& 2he#!

!e"e52#3e 58!!e%5#e" #%2$ $2he! 58!!e%5#e" 1%d 2$ &!ee 2!1de.

Wh12 e4e!7ed 1" 2he e77ed !12e 58!!e%50 !e7#4e. Me4/e!" e!e !e:8#!ed 2$

e"21/#"h 1 1!#20 $& 2he#! %12#$%1 58!!e%5#e" #% 2e!4" $& 7$d >1 e7? 1%d 2$ 41#%21#%

e65h1%7e !12e" #2h#% 8" $! 4#%8" ' $& 1!#20 >1 /1%d? /0 #%2e!3e%#%7 #% 2he#!

&$!e#7% e65h1%7e 41!;e2" >2h12 #", /80#%7 $! "e#%7 &$!e#7% 4$%e0?.

I% !152#5e, h$e3e!, "#%5e 2he !#%5#1 Re"e!3e 58!!e%50 $8d /e 2he U.S. d$1!, 2h#"

4e1%2 2h12 $2he! 5$8%2!#e" $8d e7 2he#! 58!!e%5#e" 2$ 2he U.S. d$1!, 1%d$%5e

5$%3e!2#/##20 1" !e"2$!ed$8d /80 1%d "e U.S. d$1!" 2$ ;ee 41!;e2 e65h1%7e

!12e" #2h#% 8" $! 4#%8" ' $& 1!#20. Th8", 2he U.S. d$1! 2$$; $3e! 2he !$e 2h12 7$d

h1d 10ed 8%de! 2he 7$d "21%d1!d #% 2he #%2e!%12#$%1 %1%5#1 "0"2e4.

Me1%h#e, #% $!de! 2$ /$"2e! &1#2h #% 2he d$1!, 2he U.S. 17!eed "e1!12e0 2$ #%; 2he

d$1! 2$ 7$d 12 2he !12e $& ) e! $8%5e $& 7$d. A2 2h#" !12e, &$!e#7% 7$3e!%4e%2" 1%d

5e%2!1 /1%;" e!e 1/e 2$ e65h1%7e d$1!" &$! 7$d. B!e22$% W$$d" e"21/#"hed 1 "0"2e4

$& 104e%2" /1"ed $% 2he d$1!, #% h#5h 1 58!!e%5#e" e!e de%ed #% !e12#$% 2$ 2he

d$1!, #2"e& 5$%3e!2#/e #%2$ 7$d, 1%d 1/$3e 1, 1" 7$$d 1" 7$d. The U.S. 58!!e%50

1" %$ e&&e52#3e0 2he $!d 58!!e%50, 2he "21%d1!d 2$ h#5h e3e!0 $2he! 58!!e%50 1"

e77ed. A" 2he $!d" ;e0 58!!e%50, 4$"2 #%2e!%12#$%1 2!1%"152#$%" e!e de%$4#%12ed #%

d$1!".
http://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Bank_for_Reconstruction_and_Developmenthttp://en.wikipedia.org/wiki/Pegged_ratehttp://en.wikipedia.org/wiki/International_financial_systemhttp://en.wikipedia.org/wiki/International_financial_systemhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Bank_for_Reconstruction_and_Developmenthttp://en.wikipedia.org/wiki/Pegged_ratehttp://en.wikipedia.org/wiki/International_financial_system


9/19

The U.S. d$1! 1" 2he 58!!e%50 #2h 2he 4$"2 8!5h1"#%7 $e!1%d #2 1" 2he $%0

58!!e%50 2h12 1" /15;ed /0 7$d. Add#2#$%10, 1 E8!$e1% %12#$%" 2h12 h1d /ee%

#%3$3ed #% W$!d W1! II e!e h#7h0 #% de/2 1%d 2!1%"&e!!ed 1!7e 14$8%2" $& 7$d #%2$

2he U%#2ed S212e", 1 &152 2h12 5$%2!#/82ed 2$ 2he "8!e4150 $& 2he U%#2ed S212e". Th8", 2he

U.S. d$1! 1" "2!$%70 1!e5#12ed #% 2he !e"2 $& 2he $!d 1%d 2he!e&$!e /e514e 2he ;e0

58!!e%50 $& 2he B!e22$% W$$d" "0"2e4.

Me4/e! 5$8%2!#e" 5$8d $%0 5h1%7e 2he#! 1! 318e#2h IMF 1!$31, h#5h 1"

5$%2#%7e%2 $% IMF de2e!4#%12#$% 2h12 #2" /11%5e $& 104e%2" 1" #% 1 &8%d14e%21

d#"e:8##/!#84.

Th#" C$%&e!e%5e 12 B!e22$% W$$d", !e!e"e%2#%7 %e1!0 1 2he e$e" $& 2he $!d, h1"

5$%"#de!ed 4122e!" $& #%2e!%12#$%1 4$%e0 1%d %1%5e h#5h 1!e #4$!21%2 &$! e15e 1%d

!$"e!#20. The C$%&e!e%5e h1" 17!eed $% 2he !$/e4" %eed#%7 122e%2#$%, 2he 4e1"8!e"

h#5h "h$8d /e 21;e%, 1%d 2he &$!4" $& #%2e!%12#$%1 5$$e!12#$% $! $!71%#12#$% h#5h

1!e !e:8#!ed. The 17!ee4e%2" !e15hed $% 2he"e 1!7e 1%d 5$4e6 4122e!" 1!e #2h$82

!e5ede%2 #% 2he h#"2$!0 $& #%2e!%12#$%1 e5$%$4#5 !e12#$%".

I. THE INTERNATIONAL MONETARY FUND

S#%5e &$!e#7% 2!1de 1&&e52" 2he "21%d1!d $& #&e $& e3e!0 e$e, 1 5$8%2!#e" h13e 1 3#21

#%2e!e"2 #% 2he "0"2e4 $& e65h1%7e $& %12#$%1 58!!e%5#e" 1%d 2he !e7812#$%" 1%d

5$%d#2#$%" h#5h 7$3e!% #2" $!;#%7. Be518"e 2he"e 4$%e21!0 2!1%"152#$%" 1!e

#%2e!%12#$%1 e65h1%7e", 2he %12#$%" 48"2 17!ee $% 2he /1"#5 !8e" h#5h 7$3e!% 2he

e65h1%7e" #& 2he "0"2e4 #" 2$ $!; "4$$2h0. Whe% 2he0 d$ %$2 17!ee, 1%d he% "#%7e

%12#$%" 1%d "41 7!$8" $& %12#$%" 122e42 /0 "e5#1 1%d d#&&e!e%2 !e7812#$%" $& 2he

&$!e#7% e65h1%7e" 2$ 71#% 2!1de 1d31%217e", 2he !e"82 #" #%"21/##20, 1 !ed85ed 3$84e $&

&$!e#7% 2!1de, 1%d d1417e 2$ %12#$%1 e5$%$4#e". Th#" 5$8!"e $& 152#$% #" #;e0 2$ e1d 2$

e5$%$4#5 1!&1!e 1%d 2$ e%d1%7e! 2he $!d" e15e.

The C$%&e!e%5e h1" 2he!e&$!e 17!eed 2h12 /!$1d #%2e!%12#$%1 152#$% #" %e5e""1!0 2$

41#%21#% 1% #%2e!%12#$%1 4$%e21!0 "0"2e4 h#5h # !$4$2e &$!e#7% 2!1de. The %12#$%"

"h$8d 5$%"82 1%d 17!ee $% #%2e!%12#$%1 4$%e21!0 5h1%7e" h#5h 1&&e52 e15h $2he!.
http://en.wikipedia.org/wiki/Purchasing_powerhttp://en.wikipedia.org/wiki/Par_valuehttp://en.wikipedia.org/wiki/Purchasing_powerhttp://en.wikipedia.org/wiki/Par_value


10/19

The0 "h$8d $821 !152#5e" h#5h 1!e 17!eed 2$ /e h1!4&8 2$ $!d !$"e!#20, 1%d

2he0 "h$8d 1""#"2 e15h $2he! 2$ $3e!5$4e "h$!2-2e!4 e65h1%7e d#e".

The C$%&e!e%5e h1" 17!eed 2h12 2he %12#$%" he!e !e!e"e%2ed "h$8d e"21/#"h &$! 2he"e

8!$"e" 1 e!41%e%2 #%2e!%12#$%1 /$d0, The International Monetary Fund, #2h $e!"

1%d !e"$8!5e" 1de:812e 2$ e!&$!4 2he 21";" 1""#7%ed 2$ #2. A7!ee4e%2 h1" /ee% !e15hed

5$%5e!%#%7 2he"e $e!" 1%d !e"$8!5e" 1%d 2he 1dd#2#$%1 $/#712#$%" h#5h 2he 4e4/e!

5$8%2!#e" "h$8d 8%de!21;e. D!1&2 A!2#5e" $& A7!ee4e%2 $% 2he"e $#%2" h13e /ee%

!e1!ed.

II. THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELPOMENT

I2 #" #% 2he #%2e!e"2 $& 1 %12#$%" 2h12 $"2-1! !e5$%"2!852#$% "h$8d /e !1#d. L#;e#"e,

2he de3e$4e%2 $& 2he !e"$8!5e" $& 1!2#581! !e7#$%" #" #% 2he 7e%e!1 e5$%$4#5 #%2e!e"2.

P!$7!14" $& !e5$%"2!852#$% 1%d de3e$4e%2 # "eed e5$%$4#5 !$7!e"" e3e!0he!e,

# 1#d $#2#51 "21/##20 1%d &$"2e! e15e.

The C$%&e!e%5e h1" 17!eed 2h12 e61%ded #%2e!%12#$%1 #%3e"24e%2 #" e""e%2#1 2$ !$3#de

1 $!2#$% $& 2he 51#21 %e5e""1!0 &$! !e5$%"2!852#$% 1%d de3e$4e%2.

The C$%&e!e%5e h1" &8!2he! 17!eed 2h12 2he %12#$%" "h$8d 5$$e!12e 2$ #%5!e1"e 2he

3$84e $& &$!e#7% #%3e"24e%2 &$! 2he"e 8!$"e", 41de 2h!$87h %$!41 /8"#%e""

5h1%%e". I2 #" e"e5#10 #4$!21%2 2h12 2he %12#$%" "h$8d 5$$e!12e 2$ "h1!e 2he !#";" $&

"85h &$!e#7% #%3e"24e%2, "#%5e 2he /e%e" 1!e 7e%e!1.

The C$%&e!e%5e h1" 17!eed 2h12 2he %12#$%" "h$8d e"21/#"h 1 e!41%e%2 #%2e!%12#$%1

/$d0 2$ e!&$!4 2he"e &8%52#$%", 2$ /e 51ed The I%2e!%12#$%1 B1%; &$! Re5$%"2!852#$%

1%d De3e$4e%2. I2 h1" /ee% 17!eed 2h12 2he B1%; "h$8d 1""#"2 #% !$3#d#%7 51#21

2h!$87h %$!41 5h1%%e" 12 !e1"$%1/e !12e" $& #%2e!e"2 1%d &$! $%7 e!#$d" &$! !$


11/19

1%d $% 2he $/#712#$%" h#5h 2he 4e4/e! 5$8%2!#e" 48"2 1""84e, 1%d h1" !e1!ed d!1&2

A!2#5e" $& A7!ee4e%2 155$!d#%70.

The C$%&e!e%5e h1" !e5$44e%ded 2h12 #% 51!!0#%7 $82 2he $#5#e" $& 2he #%"2#282#$%" he!e

!$$"ed "e5#1 5$%"#de!12#$% "h$8d /e 7#3e% 2$ 2he %eed" $& 5$8%2!#e" h#5h h13e

"8&&e!ed &!$4 e%e40 $55812#$% 1%d h$"2##2#e".

The !$$"1" &$!4812ed 12 2he C$%&e!e%5e &$! 2he e"21/#"h4e%2 $& 2he F8%d 1%d 2he

B1%; 1!e %$ "8/4#22ed, #% 155$!d1%5e #2h 2he 2e!4" $& 2he #%3#212#$%, &$! 5$%"#de!12#$%

$& 2he 7$3e!%4e%2" 1%d e$e $& 2he 5$8%2!#e" !e!e"e%2ed.

TRIFFINS PARADOX

U%de! 2he B!e22$% W$$d" A7!ee4e%2, 5$8%2!#e" e!e 7#3e% 2he 5h$#5e $& "e22#%7 2he 1!

318e $& 2he#! 58!!e%5#e" &$! 58!!e%2 155$8%2 2!1%"152#$%" #% 2e!4" $& 7$d $! d$1!". S#%5e

3#!2810 1 /e#7e!e%2 5$8%2!#e" %#"hed 2he 1! #% de/2 2$ 2he US &$! 1#d $! "8#e",

2he US hed 3#!2810 1 2he 7$d $! 1 51#4 $% #2. Th8", 2he US 1" 2he $%0 5$8%2!0 1/e

2$ 2he 1! 318e $& #2" 58!!e%50 #% 2e!4" $& 7$d, h#e 1 $2he! 5$8%2!#e" "e2 2he#! 1!

318e" #% 2e!4" $& 2he d$1!. The d$1! 2h8" e&&e52#3e0 !e15ed 7$d #% 2he B!e22$%

W$$d" "0"2e4 1%d 2he 318e $& 2he d$1! 1" de2e!4#%ed /0 2he h$d#%7" $& US 7$d

!e"e!3e". S#%5e 1 $2he! 5$8%2!#e" h1d "e2 1! 318e" 171#%"2 2he d$1!, 2he0 !e:8#!ed

d$1! !e"e!3e" 2$ e%"8!e 58!!e%2 155$8%2 5$%3e!2#/##20. Th#" 4e1%2 2h12 2he

"21/##20 $& e65h1%7e !12e" 1" 2he !e"82 $& #%2e!3e%2#$% #% 2e!4" $& d$1!" /0 1 5e%2!1

/1%;" e65e2 2he US. I2 41de 2he US d$1! 2he $%0 #%2e!3e%2#$% 58!!e%50 1%d 15ed 2he

"21/##20 $& e65h1%7e !12e" $% 2he ##%7%e"" 1%d 1/##20 $& %$%-US 5e%2!1 /1%;" 2$

#%2e!3e%e #% &$!e#7% e65h1%7e 41!;e2" 2$ de&e%d 2he 318e $& 2he d$1!. >I2 1"$ 4e1%2

2h12 2he US d$1! e%


12/19

I44ed#12e0 &$$#%7 2he 1!, %e1!0 1 $& 2he $!d+" 4$%e21!0 7$d 1" #% 2he US,

4$"2 $& 2he "#7%12$!#e" $& 2he B!e22$% W$$d" 2!e12#e" $ed 4$%e0 2$ 2he US. F8!2he!,

2he#! !e5$%"2!852#$% dee%ded $% #4$!2" &!$4 2he US, 2he $%0 e5$%$40 %$2 d1417ed /0

1!, "$ 2he US 1" #% /11%5e $& 104e%2" "8!8". Th8", %$2 $%0 1" 7$d "51!5e

$82"#de 2he US, 2he d$1! 1" 1"$ "51!5e.H$e3e!, 2he 14$8%2 $& d$1!" hed $82"#de

2he US e3e%2810 "8!1""ed 2he 7$d !e"e!3e" hed /0 2he US e31812ed 12 2he $

B!e22e% W$$d" 1!#20. Th8" 2he T!#&% 1!1d$6= 2he "855e""&8 $e!12#$% $& 2he

#%2e!%12#$%1 %1%5#1 "0"2e4 dee%ded $% 1% e61%"#$% $& d$1! !e"e!3e" 2$ ;ee

#%2e!%12#$%1 #:8#d#20 7!$#%7 #% "2e #2h !1#d0 e61%d#%7 $!d 2!1de.

But, this could only be achieved by a US payments deficit that continually increased

foreign claims on the fixed US gold supply. Once these claims exceeded the dollar value

of the gold supply at the $35 parity, the convertibility of the dollar into gold at the official

parity depended on the willingness of foreigners to refrain fromconverting dollars into

gold. This created a dilemmafor foreign holders of dollars, in particular foreign central

banks who were responsible for stabilising the dollar and thus had to accumulate ever-

larger dollar balances as non-official holders converted dollars to other currencies, in

particular DM. A recognition of the appreciation of the dollar value of gold a

de!e5#12#$% $& 2he d$1! !e12#3e 2$ 2he $2he! 58!!e%5#e" $8d 4e1% 51#21 $""e" $%

2he d$1! !e"e!3e". Th8" &$!e#7% h$de!" $& 2he d$1! &15ed 1 5125h-@@ "#2812#$% !e&e52ed

#% 2he T!#&% 1!1d$6. I& 2he0 5$%3e!2ed 2he d$1!" #%2$ 7$d 12 2he US T!e1"8!0 >2he0

5$8d %$2 "e 2he d$1!" &$! $2he! 58!!e%5#e" "#%5e 2he0 e!e !e"$%"#/e &$! #%7 2he

!12e" $& 2he#! 58!!e%5#e" !e12#3e 2$ 2he d$1!, h#5h 1" 1!e1d0 #% 5h!$%#5 e65e"" "80

#% &$!e#7% e65h1%7e 41!;e2"? 2h#" $8d &8!2he! !ed85e 2he 7$d /15;#%7 2he $82"21%d#%7

d$1! /11%5e" 1%d 41;e #2 4$!e #;e0 2h12 2he d$1! $8d /e de318ed, de!e5#12#%7

1 $& 2he#! d$1! !e"e!3e h$d#%7" 1%d !$d85#%7 1!7e &$!e#7% e65h1%7e $""e" $% 2he#!

/11%5e "hee2". I& 2he0 5$%3e!2ed e65e"" d$1! /11%5e" 2he0 !#";ed !e5##212#%7 1

de31812#$%, 1%d #& 2he0 d#d %$2 2he0 !#";ed e3e% 1!7e! $""e" #& 2he de31812#$%

occurred in any case.

M1%0 5$8%2!#e" >e"e5#10 F!1%5e? 1!78ed 2h12 2he !$/e4 $& e65e"" d$1! /11%5e"

5$8d/e !e"$3ed #& 2he US 2#7h2e%ed #2" d$4e"2#5 $#5#e" 1%d !1% /11%5e $& 104e%2"

"8!8"e", /82 2h#" !e4ed0 &$! 2he d$1! "8!8" $8d "#40 h13e !ed85ed 2he 7!$2h $&


13/19

#%2e!%12#$%1 #:8#d#20 1%d 5!e12ed 2he !#"; $& 7$/1 !e5e""#$% #2 1" 1% $8%5e $& 7$d 1" $!2h @*. #% 2e!4" $& 2he U.S. d$1! $3e! 2he

7$d "21%d1!d e!#$d? #% 7$d "21%d1!d. E15h 58!!e%50 #" de%ed #% 2e!4" $& #2" 7$d 318e

he%5e 1 58!!e%5#e" 1!e #%;ed 2$7e2he! #% 1 "0"2e4 $& ed e65h1%7e !12e". G$d 1"

8"ed 1" 1 4$%e21!0 "21%d1!d /e518"e #2 #" 1% #%2e!%12#$%10-!e5$7%#ed h$4$7e%e$8"

5$44$d#20 2h12 #" e1"#0 "2$!1/e, $!21/e, 1%d d#3#"#/e #%2$ "21%d1!d#ed 8%#2", "85h 1"

$8%5e". S#%5e 7$d #" 5$"20 2$ !$d85e, #2 $""e""e" 1%$2he! #4$!21%2 122!#/82e

7$3e!%4e%2" 51%%$2 e1"#0 #%5!e1"e #2" "80.

THE GOLD EXCHANGE STANDARD

A% #%2e!%12#$%1 5$%&e!e%5e 12 B!e22$% W$$d", Ne H14"h#!e, #% '(99 12 2he 5$"e $&

W$!d W1! II 2!1%"&$!4ed 2he #%2e!%12#$%1 4$%e21!0 "0"2e4 #%2$ $%e /1"ed $% 48281

5$$e!12#$% 1%d &!ee0 5$%3e!2#/e 58!!e%5#e". B0 2h#" e15h 5$8%2!0 h1d 2$ 2he 318e $&

#2" 58!!e%50 #% 2e!4" $& 7$d. Th#" e"21/#"hed 2he 1! 318e $& e15h 58!!e%50. The U.S.

1" 2he 41#% 58!!e%50 #% 2he "0"2e4 1%d ' 1" e:812ed #% 318e 2$ ') $. $& 7$d.

B0 2h#" 1 58!!e%5#e" e!e #%;ed #% 1 "0"2e4 $& ed e65h1%7e !12e".

The 4e4/e!" e!e 5$44#22ed 2$ 41#%21#%#%7 2he 318e $& 2he 58!!e%50 #2h#% -' $&

1!#20. The 31!#$8" 5e%2!1 /1%;" e!e 2$ 15h#e3e 2h#" 7$1 /0 /80#%7 1%d "e#%7 2he#!

58!!e%5#e" >8"810 171#%"2 2he d$1!? $% 2he &$!e#7%-e65h1%7e 41!;e2. Whe% 1 5$8%2!0


14/19

e6e!#e%5ed d#& 41#%21#%#%7 #2" 1!#20 318e d8e 2$ /11%5e $& 104e%2"

d#"e:8##/!#1, #2 5$8d 28!% 2$ 2he I%2e!%12#$%1 M$%e21!0 F8%d >IMF?, h#5h 1" 5!e12ed

2$ 4$%#2$! 2he !$3#"#$% $& "h$!2-2e!4 $1%" 2$ 5$8%2!#e" e6e!#e%5#%7 2e4$!1!0 /11%5e

$& 104e%2 d#e".

EXTERNAL AND INTERNAL CONVERTIBILITY

Whe% 1 h$d#%7" $& 2he 58!!e%50 /0 %$%-!e"#de%2" 1!e &!ee0 e65h1%7e1/e #%2$ 1%0

&$!e#7% >%$%- !e"#de%2? 58!!e%50 12 e65h1%7e !12e" #2h#% 2he $ 41!7#%" 2h1% 2h12

58!!e%50 #" "1#d 2$ /e e62e!%10 5$%3e!2#/e. A 104e%2" 2h12 !e"#de%2" $& 2he 5$8%2!0

1!e 182h$!#ed 2$ 41;e 2$ %$%-!e"#de%2" 410 /e 41de #% 1%0 e62e!%10 5$%3e!2#/e

58!!e%50 2h12 !e"#de%2" 51% /80 #% &$!e#7% e65h1%7e 41!;e2". A%d #& 2he!e 1!e %$

!e"2!#52#$%" $% 2he 1/##20 $& 1 5$8%2!0 2$ 8"e 2he#! h$d#%7" $& d$4e"2#5 58!!e%50 2$

15:8#!e 1%0 &$!e#7% 58!!e%50 1%d h$d #2, $! 2!1%"&e! #2 2$ 1%0 %$%!e"#de%2 &$! 1%0 8!$"e,

2h12 5$8%2!0+" 58!!e%50 #" "1#d 2$ /e #%2e!%10 5$%3e!2#/e. Th8" e62e!%1 5$%3e!2#/##20 #"

2he 1!2#1 5$%3e!2#/##20 1%d 2$21 5$%3e!2#/##20 #" 2he "84 $& e62e!%1 1%d #%2e!%1

5$%3e!2#/##20.

CONVERTIBILITY2 WHY3

E62e!%10 #%5$%3e!2#/e 58!!e%5#e" 410 /e $& !12he! #4#2ed 318e 2$ 2he#! h$de!. A%

e6$!2ed #2e4 &!$4 1 de3e$#%7 5$8%2!0 2$ 2he USSR, &$! e614e, 410 /e 1#d &$! #%

!8/e" $! 2he 58!!e%50 $& 1 5$8%2!0 2h12 h1" !12#ed A!2#5e III. The !$5eed" 410 /e

8"ed 2$ 8!5h1"e 7$$d" 1%0he!e.

I% 5$%"#de!#%7 $""#/e #4$!2 "8#e!", 2he!e&$!e, 1 de3e$#%7 5$8%2!0 # h13e "$4e

#%2e!e"2 #% d#!e52#%7 #2" #4$!2e!" 2$ 2h$"e 5$8%2!#e" 2h12 # h13e "$4e #%2e!e"2 #%

d#!e52#%7 #2" #4$!2e!" 2$ 2h$"e 5$8%2!#e" h$"e #%5$%3e!2#/e 58!!e%5#e" 1!e #% 1!7e

"80. Th#" #", $& 5$8!"e, 1 51"e $& 2!1de d#"5!#4#%12#$% 2h12 #" 5$%de4%ed /0 2!1d#2#$%1

2he$!0. Th#" 4e1%" 2h12 7$$d" 1!e %$2 /e#%7 8!5h1"ed &!$4 2he 5he1e"2 "$8!5e. Re5e%2

e5$%$4#5 !#2#%7 h1", h$e3e!, !e$e%ed 2he :8e"2#$% #% 3#e $& 2he 5$%2#%8ed e6#"2e%5e

$& #%5$%3e!2#/e 58!!e%5#e". Whe!e #2 #" !$/e $% 2he e6$!2 "#de 2$ 2!1de #2h


15/19

5$8%2!#e" 41#%21#%#%7 #%5$%3e!2#/e 58!!e%5#e", 1%d 2he 7$3e!%4e%2 #"he" 2$ e%5$8!17e

#4$!2" &!$4 2h$"e 5$8%2!#e" 2$ $&&"e2 #2" 5!ed#2 /11%5e", #2 # 82##e #2" e65h1%7e

d#"2!#/82#$% 4e5h1%#"4 2$ #4#2 2he 131#1/##20 $& 5$%3e!2#/e e65h1%7e he!e 2he!e 1!e

12e!%12#3e "8#e!" $& 2he "14e 20e $& 7$$d" #% #%5$%3e!2#/e 58!!e%50 5$8%2!#e".

CURRENT ACCOUNT CONVERTIBILITY

C8!!e%2 155$8%2 #" de%ed 1" #%58d#%7 2he 318e $& 2!1de #% 4e!5h1%d#"e, "e!3#5e",

#%3e"24e%2, #%5$4e 1%d 8%#12e!1 2!1%"&e!". C8!!e%2 155$8%2 5$%3e!2#/##20, /e#%7

e""e%2#1 2$ 2he de3e$4e%2 $& 482#12e!1 2!1de, 2h!ee 1!$15he" 2$ 58!!e%2 155$8%2

5$%3e!2#/##20 h1" /ee% 1d12ed /0 de3e$#%7 5$8%2!#e". The"e 1!e 2he !e-

1%%$8%5e4e%2, /0-!$d852, 1%d &!$%2-$1d#%7 1!$15he". E15h 1!$15h #" d#"2#%78#"hed

/0 2he #4$!21%5e #2 12215he" 2$ 5$%3e!2#/##20 !e12#3e 2$ $2he! e5$%$4#5 $/


16/19

PROS AND CONS OF CONVERTIBILITY

F8 58!!e%50 5$%3e!2#/##20 #" 2e5h%#510 e1"0 2$ 15h#e3e= "#40 e!4#2

e3e!0$%e, !e"#de%2" 1%d %$%-!e"#de%2" 1#;e, 2$ /80 1%d "e h$4e 58!!e%50 &$! $2he!

58!!e%5#e" &!ee0 1%d #2h$82 !e"2!#52#$%. C$%3e!2#/##20 &$! 58!!e%2 155$8%2 2!1%"152#$%"

>&$!e#7% 2!1de #% 7$$d" 1%d "e!3#5e", #%58d#%7 2he !e4#221%5e $& e1!%#%7"?, "85h 1" #"

!e:8#!ed /0 2he A!2#5e" $& A7!ee4e%2 $& 2he I%2e!%12#$%1 M$%e21!0 F8%d, #" 4$!e

5$4#512ed, "#%5e 2he 1$1/e 41!;e2 #" #4#2ed 2$ 1 5e!21#% 51"" $& 2!1%"152#$%" -- $!,

82 1%$2he! 10, #2 #" de"#7%ed 2$ e658de 5e!21#% 2!1%"152#$%", e"e5#10 2he 8!5h1"e /0

!e"#de%2" $& &$!e#7% %1%5#1 1""e2". I2 2he!e&$!e !e:8#!e" "$4e de21#ed !8e" 1%d 5$"e

4$%#2$!#%7, 2$ !e3e%2 2!1%"152#$%" "8$"ed0 41de &$! 58!!e%2 8!$"e" &!$4

5$%5e1#%7 h12 #% &152 1!e 51#21 2!1%"152#$%".

Wh#e 5$%3e!2#/##20 "2!#520 !e&e!" 2$ 2he &!eed$4 2$ 8!5h1"e &$!e#7% e65h1%7e

&$! d$4e"2#5 58!!e%50, 5$%3e!2#/##20 $8d %$2 /e e5$%$4#510 4e1%#%7&8 #& #5e%"#%7

e!e !e:8#!ed &$! 2he 152#3#2#e" 2h12 !e:8#!e &$!e#7% e65h1%7e, e.7. #4$!2#%7 7$$d" $!

"e!3#5e". I% h12 &$$", 2he!e&$!e, I # 8"e 5$%3e!2#/##20 #% 2he e5$%$4#510

4e1%#%7&8 "e%"e, !12he! 2h1% #% 2he %1!!$0 e71 "e%"e, $& 2he 2e!4. Th12 #",

5$%3e!2#/##20 51%%$2 /e 5$%"#de!ed #%dee%de%20 $& 2he 155$41%0#%7 !e7#4e &$!&$!e#7% 2!1de. I% 1!2#581!, 1 58!!e%50 #" de facto5$%3e!2#/e #& $8d-/e #4$!2e!" &$! 1

#de !1%7e $& 7$$d" $! "e!3#5e" 1!e &!ee 2$ /80 &$!e#7% e65h1%7e 1%d 2$ #4$!2 #2h

4#%#41 !e:8#!e4e%2", $""#/0 "8/


17/19

#" %e3e! $#2#510 $81! 1%d #& #2 e!"#"2", #2 1" #de0 /e#e3ed, 2$ "$e! 7!$2h #%

2he $%7 !8%.

The 12e!%12#3e #" 2$ 12e! 2he !12e $& e65h1%7e /e2ee% h$4e 1%d &$!e#7% 58!!e%50

/0 e%$87h 2$ "2$ 2he $82&$ -- e#2he! /0 1$#%7 #2 2$ &$12, $! /0 de!e5#12#%7 /0 "$

485h 2h12 41!;e2 1!2#5#1%2" /e#e3e #2 # de!e5#12e %$ &8!2he!, 2h12 #4$!2ed 7$$d"

/e5$4e "$ e6e%"#3e #% h$4e 58!!e%50 2h12 de41%d &$! 2he4 # &1 "#7%#3%20, 1%d

2h12 e6$!2" /e5$4e "$ !$/e 2h12 2he#! "80 # #%5!e1"e "#7%#3%20 >$!,

dee%d#%7 $% 2he "#7%#3%5e $& $8! 5$8%2!0 #% 2he $!d !$d852 41!;e2, 2h12 2he !#5e

$& e6$!2" # &1 "8e%20 #% &$!e#7% 58!!e%50 2h12 &$!e#7% de41%d # /e 7!e120

"2#4812ed?. F$! 1 e!#$d #% 2he '(*" "$4e e1"2#5#20 e""#4#"2" d$8/2ed 2h12 any

e65h1%7e !12e 5$8d 5e1! 2he &$!e#7% e65h1%7e 41!;e2, /0 h#5h 2he0 !e10 4e1%2 2h12

2he !e:8#!ed de!e5#12#$% 4#7h2 /e 3e!0 1!7e. Th12 #% 28!% 5$8d h13e $2he! 8%de"#!1/e

5$%"e:8e%5e", 2$ #2= 1 "h1! #%5!e1"e #% 2he d$4e"2#5 !#5e e3e, d!#3e% /0 2he !#"e #% 2he

!#5e" $& 2!1d1/e 7$$d", h#5h 4#7h2 2!#77e! h#7he! #%&12#$%1!0 e6e5212#$%", e#2he!

/e518"e 2he 8/#5 51%%$2 d#"2#%78#"h 1 $%5e-&$!-1 !#"e #% 2he !#5e e3e &!$4 1%

155ee!12#$% $& #%&12#$%, $! /e518"e 2he !#5e #%5!e1"e $8d #% &152 2!#77e! 1%

#%&12#$%1!0 !$5e"" he!e/0 17e-e1!%e!" 1%d $2he!" 122e42ed 2$ !e"2$!e 2he#! !e1

#%5$4e" /0 #%"#"2#%7 $% h#7he! %$4#%1 17e" >1%d $2he! #%5$4e"?.

The"e 1!e 2he ;#%d" $& 5$%5e!%" 2h12 $$%e%2" $! ";e2#5" $& 58!!e%50

5$%3e!2#/##20 hed #% 2he '(*", 1%d h$d e3e% 2$d10 #% "$4e :81!2e!". I% 1dd#2#$%,

"e3e!1 $2he! #%h#/#2#$%" "h$8d /e 4e%2#$%ed. F#!"2, #2 4#7h2 /e 1!78ed 2h12 2he !152#51

d#"2#%52#$% /e2ee% 58!!e%2 1%d 51#21 2!1%"152#$%" #" d#& $! #4$""#/e 2$ "8"21#%,

1%d 2h12 2$ !e3e%2 $82&$" $& !e"#de%2 51#21 !e:8#!e" 5$%2!$" $3e! 58!!e%2 2!1%"152#$%"

1" e, #2h 1 3#e 2$ e%"8!#%7 d$4e"2#5 "13#%7" 1!e #%3e"2ed d$4e"2#510 - #.e. 1" 1%

1d1" 41%0 7$3e!%4e%2" #% de3e$#%7 5$8%2!#e" d#d, 2h!$87h "212e-$%ed-e%2e!!#"e"?,

2he0 %eeded "$4e #%"2!84e%2 &$! "2ee!#%7 #%3e"24e%2 #% 2he de"#!ed d#!e52#$%. A$512#$%


18/19

$& 5!ed#2 1" 2he !#%5#1 5h$"e% #%"2!84e%2, e.7. #% F!1%5e, J11%, 1%d S$82h K$!e1, /82

1$512#$% $& &$!e#7% e65h1%7e 10ed 1% #4$!21%2 1d


19/19

$!d !#5e" #" #%1d3#"1/e, /$2h /e518"e #2 e!e2812e" 2he !#%5#e $& 1d4#%#"2!12#3e

5$%2!$ $& !#5e" >1" $$"ed 2$ 41!;e2 de2e!4#%ed !#5e"? 1%d /e518"e "85h 5$%2!$

51%%$2 /e &80 e&&e52#3e #% 1 $!d #2h 4##$%" $& !$d852" $& d#3e!"e :81#2#e".

A 2h#!d !e1"$% &$! &13$!#%7 e1!0 5$%3e!2#/##20 $& 2he !8/e #" 2$ !$3#de 7$$d" 2$

S$3#e2 $!;e!" h$"e #%5e%2#3e 2$ $!; #" %$ 1d3e!"e0 1&&e52ed /0 e62e%"#3e

"h$!217e". Oe%#%7 2he e5$%$40 $8d $&&e! 1 #de 1!!10 $& %e 7$$d", 1/e#2 &$!

8!5h1"e 12 h#7h !#5e". I2 $8d %$2 $%0 !$3#de e&&e52#3e 17e 7$$d", /82 $8d 1"$

he !ed85e 2he !8/e $3e!h1%7, "#%5e !4" 1%d h$8"eh$d" $8d /e 4$!e ##%7 2$

h$d %1%5#1 1""e2", h#5h 1!e %$2 h#7h /0 e"2e!% "21%d1!d". I2 $8d 1"$ !$3#de 2he

G$3e!%4e%2 #2h !e3e%8e &!$4 216e" e3#ed $% #4$!2", 1" e !$$"e /e$.

F#%10, 5$%3e!2#/##20 $8d !$3#de 1 "2!$%7 "2#488" 2$ de3e$ e6$!2

41!;e2". A2 2he e65h1%7e !12e !e:8#!ed 2$ 41;e 2he !8/e 5$%3e!2#/e, e6$!2" $8d /e

e62!e4e0 !$/e &$! %e0 #%dee%de%2 e%2e!!#"e". A82$%$4$8" e%2e!!#"e" $8d

h13e 1 "2!$%7 %1%5#1 #%5e%2#3e 2$ de3e$ e6$!2 41!;e2", 1%d 2h12 $8d 8"h 2he4

&!$4 2he /e7#%%#%7 2$ 21;e #%2$ 155$8%2 %$2 $%0 2he !#5e /82 1"$ 2he :81#20 $& !$d852"

2h12 1!e "$d #% 2he $!d 41!;e2.

Wh#e 2he 1!784e%2 1" 41de &$! 2he 2he%-USSR, #2 h1" 4$!e 7e%e!1

1#51/##20 2$ 2he "h#&2 $& 1%0 5$441%d e5$%$40 2$ 1 41!;e2-$!#e%2ed $%e. A%d #% &152

58!!e%50 5$%3e!2#/##20 1" #%2!$d85ed #% 2he e1!0 !e&$!4 15;17e" $& 41%0 $& 2he4, $!

"$$% 2he!e1&2e!. We # e6$!e /e$ 2he e62e%2 2$ h#5h 2he 5$%5e!%" e6!e""ed /0

2h$"e 1%6#$8" 1/$82 58!!e%50 5$%3e!2#/##20 514e 2$ 1"", &$$ed /0 1 d#"58""#$% $&

"$4e $& 2he 5$%"#de!12#$%" #%h#/#2#%7 1 4$3e 2$1!d 5$%3e!2#/##20 #% E8!$e #% 2he 12e

'(9*" 1%d e1!0 '(*".

Documents

Bretten Wood System Final