Paper Summary:

The Bretton Woods system of international monetary management was set up after World War II and established the rules for commercial and financial relations among the world's major industrial states. This paper attempts to analyze to which political considerations precipitated the inception and then the eventual collapse of the Bretton Woods system.

From the Paper:

"Through loans and the Marshall Plan, money flowed into Europe; tariffs on American imports were put in place as a temporary measure to help in reconstruction. As a result, Europe was able to increase productivity and create a regional bloc that discriminated in favor of each other and against the United States. The extension of credit through loans and aid resulted in a deficit in the balance of payments in the United States, which was seen as necessary at the time 'if other countries, and especially those of Europe, were to build their reserves at the rate they did. The United States and the whole free world economy benefited by this' (Diebold, 1960:6). The end of the 1950s saw the end of exchange controls in Europe. "

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