What was the Bretton Woods agreement, and why is it no longer working?
Angelo Caloia: The Bretton Woods Accords of 1944, elaborated by the main Allied powers (including the Soviets) in Bretton Woods, New Hampshire, while the Second World War was still on, aimed in essence at the reorganization of the world’s monetary and financial system. The accords were the basis of the creation of the International Bank for Reconstruction and Development (today the World Bank) and of the International Monetary Fund (IMF). The accords produced an international monetary system based on gold and the dollar, with exchange rates relatively fixed and with loans to finance temporary balance of payment deficits. The convertibility of the dollar into gold guaranteed the American currency an intrinsic value, while the regulation of the oscillations in exchange rates limited the phenomenon of competitive devaluation. The decline of government intervention in private economic activity, dissatisfaction with the pre-emince of the US (which began to export inflation impoverishing the
