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By the 1970's the unsustainability if the Bretton Woods System became increasingly apparent. Evaluate the factors which led to the collapse of the Bretton Woods System and its impact on the subsequent evolution of the international political economy.

With World War II rapidly coming toward an end, there was a global fear. A fear that the world was going to return to the economic protectionism that led the world economy to the brink of collapse in the 1930's. A new global political system needed to be formed, with the Allies, most importantly America, leading the way. As Robert Skidelsky(2004) puts it in his biography of John Maynard Keynes the U.S wanted to 'destroy Britain’s pre-war financial and trading system, based on the sterling area and imperial preference' and create a new monetary order to regulate the worlds economy. So on the 1st of July 1944, 44 Allied nations met for the Bretton Woods conference, during which the new neo-liberal policies were formed in order to open markets and lower trade barriers and movement of capital. The bretton woods system had three main features- fixed exchange rates(”par values” agreed with the international monetary fund and changed only in consultation with it); currencies that were freely converitble into each other or into gold; and freedom from exchange restrictions, at least on current payments. Controls on capital movements were permitted (Garritsen de Vrie, M. n.d) The Bretton Woods system had two governing bodies, the IMF which was there to give permission to countries to change there currency exchange rate and hand out loans for countries to sort out there current account deficit, and the IBRD which was there to give out loans to encourage growth after the disastrous effects of the World War II. In this essay I intend to evaluate the factors which led to this new

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