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International monetary institutions;
During the inter-war years, all the countries of the world were forced off the gold standard. It was a period of fluctuating exchange rates, blocked accounts, high tariffs, competitive exchange depreciation and quota system, etc. etc. Trade was carried on by entering into bilateral agreements. The world specialization and productivity was continuously declining.
When the Second World War was still going on, Great Britain and North America were giving serious thought to the problem of Post war International Exchange. The object was to increase international trading by promoting international monetary co-operation.
In order to achieve this objective, the return to gold standard was considered difficult because the system proved too rigid.
It made each country a slave rather than a master of its economy destiny. The return to free exchange rates, the other extreme, was also not agreed upon, because it increases the risk in international trading and thus reduces total volume of trade. The desire was to secure the advantages of both the systems, i.e., gold standard and free exchange rates without their disadvantage.
In 1943 U.K. and U.S.A. submitted two plans fostering international trade through stable exchange rates. In July, 1994 the United Nations Monetary and Financial Conference was held at Breton Wood to discuss the two currency plans known as Keynes Plan and the White Plan put forward by the economic experts of the Great Britain and U.S.A.
During the inter-war years, all the countries of the world were forced off the gold standard. It was a period of fluctuating exchange rates, blocked accounts, high tariffs, competitive exchange depreciation and quota system, etc. etc. Trade was carried on by entering into bilateral agreements. The world specialization and productivity was continuously declining.
When the Second World War was still going on, Great Britain and North America were giving serious thought to the problem of Post war International Exchange. The object was to increase international trading by promoting international monetary co-operation.
In order to achieve this objective, the return to gold standard was considered difficult because the system proved too rigid.
It made each country a slave rather than a master of its economy destiny. The return to free exchange rates, the other extreme, was also not agreed upon, because it increases the risk in international trading and thus reduces total volume of trade. The desire was to secure the advantages of both the systems, i.e., gold standard and free exchange rates without their disadvantage.
In 1943 U.K. and U.S.A. submitted two plans fostering international trade through stable exchange rates. In July, 1994 the United Nations Monetary and Financial Conference was held at Breton Wood to discuss the two currency plans known as Keynes Plan and the White Plan put forward by the economic experts of the Great Britain and U.S.A.
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