The post Bretton Woods system: 1973.E2.80.93 present International monetary systems

the new york stock exchange. current era has seen huge , turbulent flows of capital between nations.

an alternative name post bretton woods system washington consensus. while name coined in 1989, associated economic system came effect years earlier: according economic historian lord skidelsky washington consensus seen spanning 1980–2009 (the latter half of 1970s being transitional period). transition away bretton woods marked switch state led market led system. bretton wood system considered economic historians have broken down in 1970s: crucial events being nixon suspending dollar s convertibility gold in 1973, united states abandonment of capital controls in 1974, , uk s ending of capital controls in 1979 swiftly copied other major economies.

in parts of developing world, liberalisation brought significant benefits large sections of population – prominently deng xiaoping s reforms in china since 1978 , liberalisation of india after 1991 crisis.

generally industrial nations experienced slower growth , higher unemployment in previous era, , according professor gordon fletcher in retrospect 1950s , 60s when bretton woods system operating came seen golden age. financial crises have been more intense , have increased in frequency 300% – damaging effects prior 2008 being chiefly felt in emerging economies. on positive side, @ least until 2008 investors have achieved high rates of return, salaries , bonuses in financial sector reaching record levels.

the revived bretton woods system identified in 2003

from 2003, economists such michael p. dooley, peter m. garber, , david folkerts-landau began writing papers describing emergence of new international system involving interdependency between states high savings in asia lending , exporting western states high spending. similar original bretton woods, included asian currencies being pegged dollar, though time unilateral intervention of asian governments in currency market stop currencies appreciating. developing world whole stopped running current account deficits in 1999 – seen response unsympathetic treatment following 1997 asian financial crisis. striking example of east-west interdependency relationship between china , america, niall ferguson calls chimerica. 2004, supposed new bretton woods , fiction , , called elimination of structural imbalances underlie it, viz, chronic current account deficit.

however, since @ least 2007 authors have called new de jure system: key international financial institutions imf , world bank revamped meet demands of current age, , between 2008 , mid-2009 term new bretton woods increasingly used in latter sense. late 2009, less emphases on structural reform international monetary system , more attention being paid issues such re-balancing world economy.

since 2011, sanjeev sanyal, colleague of dooley, garber , folkerts-landau has taken framework step further argue periods of global economic expansions underpinned symbiotic imbalances. such imbalances cause distortions inevitable part of expanding economic ecosystems. thus, argues next round of economic growth again underpinned return global imbalances, china supplying capital , again running deficits absorb it. names relationship bretton woods iii.