The Bretton Woods system was introduced at an international conference held in the village of the same name in 1944. Representatives from forty-four countries met to lay the groundwork for a new international monetary order that would promote trade between nations and prosperity.
The rules of Bretton Woods, in part, similar to the gold standard because gold also plays the role of the reference unit. The major difference, however, is the addition of a monetary framework, namely the U.S. dollar.
The scheme proposed by the system exchange rate is not fixed or floating, as it is specified that the variations between the prices of different currencies should be neither higher nor lower than a certain level. Thus, the United States became the new global economic power, the role occupied by Great Britain at the time of the gold standard.
The Bretton Woods system was to last until 1973, when the United States decided, after the dollar devalued several times, the exchange rate of their currency is now floating.
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