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JC H2 History Tuition - What is World Trade Organization and its function - JC History Essay Notes

What is World Trade Organization and its function?

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapters 1: Reasons for growth of the global economy & Problems of economic liberalisation

Re-look at the contributions of the World Trade Organization ever since its inception in 1995 [Video by the World Trade Organization]

What is the World Trade Organization (WTO)?
The WTO is an inter-governmental organization that formalized international trade. Under the Marrakesh Agreement, the organization was formed on 1 January 1995, replacing the multilateral framework known as the General Agreement on Tariffs and Trade (GATT).

A Prelude to WTO: Trade Rounds under GATT
Before the WTO was established, GATT provided the essential guidelines on international trade from 1948 to 1994. During the Bretton Woods Conference, an International Trade Organization (ITO) was supposed to be formed alongside two other pillars (World Bank and the International Monetary Fund). Yet, the US Congress refused to ratify the Havana Charter. As such, the concept of an ITO was not realized.

Even so, GATT had played its part in promoting multilateral discussions. In the post-war years, GATT contributed to tariff reductions of nearly 8 percent on average till the 1960s.

1. Kennedy Round (1964-1967)
During the Kennedy Round, an Anti-Dumping Agreement was passed. ‘Dumping’ refers to an unfair trade practice in which a firm sell its exports at a price below the price set in the domestic market. The Act was recognized as a success, especially for developing nations.

Recognizing that anti-dumping practices should not constitute an unjustifiable impediment to international trade and that anti-dumping duties may be applied against dumping only if such dumping causes or threatens material injury to an established industry or materially retards the establishment of an industry;

Considering that it is desirable to provide for equitable and open procedures as the basis for a full examination of dumping cases;

An excerpt from the Kennedy Round.

2. Tokyo Round (1973-1979)
In the 1970s, the Tokyo Round was held with the intention to manage the imposition of non-tariff barriers (NTBs). Although participating countries managed to agree on the reduction of tariffs on industrial goods, they were unable to accept the use of plurilateral agreements (they are trade agreements between more than two countries).

The Tokyo Round also led to the adoption of a range of specific new disciplines. These included the legalization of preferential tariff and nontariff treatment in favour of developing countries and among developing countries.

Codes were negotiated on subsidies and countervailing measures, technical barriers to trade (product standards), government procurement, customs valuation, import licensing, antidumping (a revision of a Kennedy Round code), bovine meat, dairy products and civil aircraft…

By negotiating a code, like-minded countries were able to agree to new, legally binding commitments, without having all GATT contracting parties on board.

An excerpt from “The Political Economy of the World Trading System” by Bernard M. Hoekman, Michel M. Kostecki

3. Uruguay Round (1986-1994)
The eighth and final round lasted nearly seven and a half years. In the wake of the twin oil shocks of the 1970s, the Uruguay Round was held as the largest multilateral trade negotiation. The main purpose of the round was to reduce agricultural subsidies, introduce the protection of intellectual property and liberalise trade services in the banking sector. It was a tricky issue due to the sensitivity of the agricultural and textile sectors that affected many developing countries. Furthermore, the round dragged on due to the lack of consensus between the USA and European Union (EU) [also known as the “European Community”, EC] over the reforms to agricultural trade.

For much of the Round the USA and the EC held their own mini-round and their mutual intransigence, especially over agriculture and specifically a long-running dispute over oil seeds, stalled the Uruguay Round for some time. Completion of the Round was in the end facilitated by the so-called Blair House (Washington) accords…

Negotiations on agriculture were among the most contentious of the Round, the final Agreement on Agriculture seeking reforms for a ‘fair and market-oriented agricultural trading system’, but with special consideration for poorer countries and for non-trade concerns such as food security, environmental protection or schemes for diversification from narcotic crops and the like.

An excerpt from “The Free Trade Adventure: The WTO, the Uruguay Round and Globalism–a Critique” by Graham Dunkley.

The WTO
As the Uruguay Round concluded in December 1993, the Marrakesh Agreement was signed on 15 April 1994 by 123 participating nations. Officially, the WTO was formed eight months later, ushering a new era for international trade. The WTO replaced GATT as the institutional framework for trade.

1. The WTO shall facilitate the implementation, administration and operation, and further the objectives, of this Agreement and of the Multilateral Trade Agreements, and shall also provide the framework for the implementation, administration and operation of the Plurilateral Trade Agreements.

2. The WTO shall provide the forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to this Agreement. The WTO may also provide a forum for further negotiations among its Members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference.

An excerpt from the Marrakesh Agreement – Article 3 “Functions of the WTO”, 15 April 1994.

What can we learn from this article?
Consider the following question:
– How far do you agree that trade liberalization was beneficial to the global economy from 1945 to 2000?

Join our JC History Tuition and find out more about the Bretton Woods System and other areas relating to the global economy. We provide summary notes for H2 History and H1 History as well as practices for essay writing and source based case studies. Attend our online learning classes to develop an analytical mind.

We have other JC tuition classes, such as GP TuitionEconomics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to learn more.

JC History Tuition - What is GATT and its purpose - Global Economy Notes

What is GATT and its purpose?

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapters 1: Reasons for growth of the global economy & Problems of economic liberalisation

Examine the history of the multilateral trading system, namely the GATT and the WTO [Video by the World Trade Organization]

Origins of a multilateral trading institution: ITO
Before the World Trade Organisation (WTO) was established on 1 January 1955, leaders from over 50 countries gathered during the “Bretton Woods” Conference and contemplated on the creation of an International Trade Organisation (ITO). Ideally, it was to be the third pillar of the Bretton Woods, together with the World Bank and the International Monetary Fund (IMF).

The proposed ITO was meant to promote world trade, cross-border investments and commodity agreements. Following the end of World War Two, more countries supported trade liberalisation. They sought to reverse the adverse protectionist stance since the early 1930s.

A by-product of failed negotiations: GATT
Amidst negotiations, 23 “contracting parties” signed the General Agreement on Tariffs and Trade (GATT) on 30 October 1947. GATT was created as a framework for international trade, taking effect on 1 January 1984.

The signatories were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and the United States.

There were three provisions:

  • Conferment of “Most Favoured Nations” status to other members
  • Prohibition of trade restrictions (except for emerging industries)
  • Elimination of import tariffs (by developed countries to support the admission of developing countries)

However, the path to institutionalise world trade proved difficult. Although the USA was one of the key advocates of free trade, the US Congress opposed the decision. During the fifth Session of the Contracting Parties, USA announced that the ITO Charter (Havana Charter) would not be re-submitted to the US Congress. From then on, the ITO did not take shape. Instead, GATT became the multilateral framework from 1948 to 1995.

Periodic Bargaining: Trade Rounds
From 1949 to 1973, the trade rounds were focused on reduction of tariffs. In 1964, the “Kennedy” Round took place and a noteworthy act was signed. The Final Act was signed by 50 participating countries that accounted for three-quarters of world trade. Concessions were estimated at $40 billion of trade value.

Following the admission of newly-independent countries (Recall: the Third World decolonisation in Asia and Africa led to the admission of new developing member countries into the UN), the GATT included its third provision to support developing countries. The Committee on Trade and Development was established to ensure that developed countries gave priority to the reduction of trade barriers to exports of developing countries.

Setbacks: The advent of “New Protectionism”
Although trade rounds were still being conducted from 1973 to 1993, the start of the Crisis Decades made it difficult for member nations to fully adhere to the provisions of trade liberalisation. Although economic integration enabled freer access of goods and services between countries, it also meant the intensification of trade competition from developed and developing countries.

For example, USA experienced severe and persistent trade deficits vis-à-vis West Germany and Japan. In response, USA introduced protectionist policies, particularly non-tariff barriers to shield its economy from the adverse effects of trade competition. For example, the “Voluntary Export Restraint” (VER) agreement restricted the quantity of Japanese automobile exports to USA in 1981.

The next phase of international trade: WTO
Trade negotiations during the Uruguay Round finally made progress. On 15 April 1994, the Marrakesh Agreement was signed, which led to the formation of the WTO that succeeded the GATT.

Developing nations demanded that VERs should be outlawed. Notably, this led to the creation of the Multi-Fibre Arrangement that accelerated the liberalisation of trade in the agricultural sector.

What can we learn from this article?
Consider the following question:
– How far do you agree that GATT was the main driving force that caused the liberalisation of world trade [to be discussed in class]?

Sign up for our JC History Tuition and learn how to answer A Level History essay and source based case study questions effectively. We also incorporate online learning features to diversify your study methods such that learning the historical developments is enjoyable and productive at the same time.

We have other JC tuition classes, such as GP TuitionEconomics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to learn more.

JC History Tuition - What is the difference between World Bank and the IMF - Global Economy Notes

What is the difference between the World Bank and the IMF?

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapters 1: Reasons for growth of the global economy & Problems of economic liberalisation

Learn more about the differing functions of the World Bank and the IMF [Video by CNBC International]

A confusing perspective: The World Bank and IMF
It has become a common issue for people to ask what are the defining roles of the World Bank and the International Monetary Fund (IMF). In fact, during the inaugural meeting of the IMF, the British economist John Maynard Keynes was confused by the names. He added the the IMF should have been described as a ‘bank’, whereas the World Bank should be recognised as a ‘fund’.

Let’s recap on the roles of the IMF and the World Bank separately.

#1. The IMF
From 1945 to 1971, the IMF was established for two key purposes:

  • Currency stabilisation through a fixed exchange rate system
  • Provision of short-term loans to finance balance of payment deficits

Currency stabilisation was achieved through the US Dollar (USD) that was pegged to the gold. From 1958 to 1971, the USD was fixed in value to gold at $35 per ounce. Then, all other foreign currencies were pegged to the USD. In other words, USD became the international reserve currency. As such, stable currency values ascertain prices, thus encouraging greater trading and investment activities.

As for the second purpose, the IMF held a pool of funds that nations could borrow from to finance their debts. This pool of funds was to be contributed by member states, including the USA. The correction of balance of payment deficits is critical in maintaining exchange rate stability as well. These conditional loans were given to countries that agreed to correct their trade deficits through policy adjustments like austerity measures.

#2. The World Bank
As for the World Bank, its immediate role after World War Two was to provide long-term financing for devastated nations to rebuild their economies. Formerly known as the International Bank for Reconstruction and Development (IBRD), the institution was initially backed by the USA. For instance, the Marshall Aid was given to Europe for post-war reconstruction.

By the 1960s, the World Bank was more involved in financing the infrastructure projects in developing countries to realise their economic potential. Following the decolonisation of the Third World nations in Asia and Africa, many developing countries were in dire need of these loans.

Changes in the functions of the IMF and the World Bank: 1970s
After the US experienced the twin deficits in the 1960s and realised that a fixed exchange rate system was unsustainable, US President Nixon announced the abandonment of the fixed exchange rates regime on 15 August 1971. From 1973 onward, the IMF focused its efforts in providing short-terms to correct the balance of payment deficits of member nations.

Also, it was involved in managing the Third World Debt Crisis of the 1980s. In 1982, the Latin American nations negotiated with both banks and the IMF for debt repayments. As a result, the ‘bail-out loans’ were introduced. Should the debtor nation agree to accept the IMF loan, the government must agree to conduct policies to achieve macroeconomic stabilisation, such as reduction in government subsidies (part of the austerity measures).

However, the IMF bail-outs had disastrous impacts on the debtor nations. Without government subsidies, many households were unable to cope with the high cost of living. In Bolivia, the price of bread rose four times. Living standards deteriorated significantly. On separate but related note, the ‘IMF bail-out loans’ were introduced to Thailand and Indonesia during the Asian Financial Crisis.

As for the World Bank, it expanded its lending role to include “structural- and sector-adjustment loans” in the 1980s. These loans were meant to facilitate economic reforms to support the heavily indebted nations in Latin America and sub-Saharan Africa.

What can we learn from this article?
Consider the following question:
– Assess the significance of the IMF and World Bank in contributing to the growth of the global economy [to be discussed in class].

Sign up for our JC History Tuition and review your comprehension of the Global Economy as well as other topics like the United Nations to be ready for the GCE A Level History examinations. We also conduct classes for students taking H1 History, which covers contrasting topics such as Superpower Relations with China and the Cold War in Southeast Asia.

Besides, we have other JC tuition classes, such as GP TuitionEconomics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to find out more.

JC History Tuition Bishan Singapore - What caused Japan's Economic Miracle - Global Economy Notes

What caused Japan’s economic miracle?

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 1: Reasons for growth of the global economy

Find out what happened the Japan after World War Two to understand its rapid economic transformation – Video by Economics Explained

Historical Context: What is the “Japanese Economic Miracle”?
It refers to the period from 1945 to 1991 where Japan experienced rapid economic growth. Following the end of World War Two (WWII), Japan’s infrastructure was severely devastated by the bombing campaigns. Millions were unemployed. There was high inflation. However, USA chose to oversee the post-war recovery of Japan.

Under the auspices of the Supreme Commander of the Allied Powers (SCAP), General Douglas MacArthur, Japan received substantial financial aid and assistance to rebuild its economy. This was carried out after the signing of the Treaty of Peace with Japan (also known as the Treaty of San Francisco) on 8 September 1951 that marked the end of Japan’s imperialism and the start of a US-Japan allied relationship.

1. Role of the USA: Dodge Line, foreign aid and the rise of Keiretsu
The president of Detroit Bank Joseph Dodge introduced economic stabilisation plans to lower inflation rates in Japan. This was known as the “Dodge Line” stabilisation in 1949. One of the key points in the policy was to fix the exchange rate to 1 USD to 360 Yen. With stable exchange rates, Japanese export prices could be kept low and competitive.

Following the start of the Korean War on 25 June 1950, USA launched the “direct procurement” program that enabled the US forces to purchase wartime supplies from Japan directly. For instance, the US army bought processed food, disinfectants and medical syringes from Japan. Industrialised firms like Toyota also gained from this favourable climate as it exported trucks to support the American military efforts in Korea.

Another US-guided reform was the breakup of the Zaibatsu, which were big businesses (Sumitomo, Mitsubishi and Mitsui) that supported Japanese militarism during WWII. Instead, these companies became a new form of firms, known as the keiretsu. It refers to a group of companies that have interlocking business relationships. In the subsequent years, these companies became the key pillar of the Japanese economic miracle.

2. Role of the Japanese Government: MITI and EOI
In addition to the support provided by USA, the Japanese government established the Ministry of International Trade and Industry (MITI) in May 1949. Its purpose was oversee the conduct of industrial policies through cross-agency coordination.

The MITI identified sectors that yield large economic potential and channel state resources to nurture the relevant industries. The government then implemented protectionism (use of artificial trade barriers to limit the inflow of foreign goods) to accelerate the growth of domestic firms. Over time, the government facilitated the dominance of the keiretsu.

Under the leadership of Japanese Prime Minister Hayato Ikeda, the early 1960s marked the start of the export-oriented industrialisation (EOI). By 1970, Japan was one of the world’s largest producers of ships and cars.

3. Significance of Culture: Industriousness and Frugality
Similar to South Korea, the Japanese were known for their high level of self-discipline. Due to their willingness to work and support their employers, many firms benefited from the increased labour productivity. This hard work ethic can be traced to the shared hardship experienced by the citizens during wartime. Therefore, the Japanese firms maintained strong employer-employee relations.

Additionally, many households in Japan had large domestic savings. This meant that banks had greater sources of financing to support the business activities of firms. The government capitalised in this frugal nature of the citizens by offering lower interest rates so that firms were incentivised to take loans and support the growth of the economy.

What can we learn from this article?
Consider the following question:
– Assess the importance of the government in causing the Japanese economic miracle [to be discussed in class].

Sign up for our JC History Tuition and learn how to consolidate your knowledge for effective essay writing. Our online learning programme also features essay discussion and class practices. Through a step-by-step learning approach, you will be more aware of the critical steps to take in analysing and answering questions for GCE A Level History examinations.

Also, we offer other JC tuition programmes, such as GP TuitionEconomics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to find out more.

JC History Tuition Bishan Singapore - What happened at the Bretton Woods Conference in 1944 - Global Economy Notes

What happened at the Bretton Woods Conference in 1944?

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 1: Reasons for growth of the global economy

A quick recap on what the “Bretton Woods” system – loosely described as a “three-legged stool” that features the International Monetary Fund (IMF), World Bank and General Agreement on Tariffs and Trade (now called the World Trade Organisation)
[Video by Center for Strategic & International Studies]

Historical Context
Amidst the ongoing World War Two, world leaders from 44 nations, including USA and Soviet Union, attended a conference at Bretton Woods, New Hampshire in July 1944.

As the Great Powers envisioned a world that is free from Nazi and Japanese occupation, there were calls for a global financial order. Two institutions were established following the Bretton Woods Conference: The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) [later known as the World Bank].

1. The International Monetary Fund
Before the Conference, Harry Dexter White (Special Assistant to the US Secretary of the Treasury) and John Maynard Keynes (advisory to the British Treasury) carried out plans in 1942.

Their drafts include the creation of organisations that provide financial assistance to countries that are experiencing balance of payment deficits. Eventually, there was common consensus to pursue fixed exchange rates at the global level.

On 21 April 1944, leaders of the Allied Powers released a joint statement that officially declared the creation of the IMF. The IMF was responsible for the maintenance of a system of fixed exchange rates.

In particular, it was based on a Gold-US Dollar exchange rate system. Till 1971, the USD was pegged to gold at $35 per ounce. Other foreign currencies were fixed to the USD. By doing so, USD became the anchor for stable currencies and facilitated international trade and investments.

Additionally, the IMF was also charged with the responsibility to provide short-term financial assistance to countries that experience temporary deficits in their balance of payments.

2. The World Bank
The second product of the Bretton Woods Conference was the IBRD. Both White and Keynes observed that many developing nations were lacking funds to develop their infrastructure.

Furthermore, the devastation caused by World War Two left these countries in dire need of post-war recovery, which incurred large expenditures. Therefore, the IBRD was set up to provide financial assistance to Europe, Japan and developing nations for reconstruction.

At the early stages, USA provided a major source of financing for post-war recovery, as evidenced by the Marshall Plan. Nevertheless, the IBRD played its part, as seen by its first issuance of loan to France.

Later, the organisation was renamed as World Bank. It expanded into multiple sub-entities, such as the International Development Association in 1960 (IDA) that lends to low-income countries and the International Finance Corporation in 1956 (IFC) that supports private investments in countries.

3. General Agreement on Tariffs and Trade (GATT)
The third feature was formed much later in April 1947. During the Bretton Woods Conference, proposals were made to establish an International Trade Organisation. However, USA did not ratify the treaty, thus an alternative arrangement was carried out, known as the GATT.

The GATT was introduced to encourage free trade between countries. This is done through regular meetings that facilitate periodic bargaining, in which member countries agree to reduce tariffs for various products.

In 1995, GATT was replaced by the World Trade Organisation (WTO). It was a milestone achievement as more countries agreed to liberalise their markets and reduce tariffs.

What can we learn from this article?
Consider the following question:
– How far do you agree that the Bretton Woods system was the main reason for the growth of the global economy from 1945 to 1973 [to be discussed in class]?

Sign up for our JC History Tuition and learn how to apply your knowledge to essay questions for GCE A Level History.

Also, we have other JC tuition classes, such as GP TuitionEconomics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to learn more.

JC History Tuition Bishan Bedok Tampines Singapore - What caused the Golden Age of Capitalism - JC History SBQ Skills

What caused the Golden Age of Capitalism?

What is the Golden Age of Capitalism?
The ‘Golden Age of Capitalism’ refers to a momentous period of economic growth that lasted from the end of World War Two in 1945 to the early 1970s. The economic recovery of Western Europe and East Asia had accelerated growth and expansion of the global economy. In this topic, we will find out what were the contributing factors that gave rise to this remarkable period of economic prosperity that improved the living standards of many countries.

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 1: Reasons for growth of the global economy 

In the following section, we will cover some of the key reasons for the growth and development of the world economy.

1. Post-War Economic Reconstruction [After 1945] 
Against the backdrop of a devastating war that left the affected countries in ruins, post-war economic reconstruction was of paramount importance to revive the industries. The emphasis on wartime production had affected the nature of industries [e.g. production of military supplies]. In particular, Western Europe and Japan were in poor shape due to the protracted military confrontations. As such, economic recovery was made possible through the provision of foreign aid, such as the United Nations Relief and Rehabilitation Administration (UNRRA) and the Marshall Plan.

With the substantial economic relief, these recipient countries revive their industries quickly. For example, Western European countries only required three years to restore pre-war production levels. By 1947, global industrial production was back to pre-war levels. As a result, the robust growth of developed countries contributed to higher consumption of goods and services. This development was then reinforced by the liberalisation of world trade.

2. Liberalisation of World Trade [General Agreement on Tariffs and Trade, 1947]
During the Bretton Woods Conference of 1947, members of the United Nations (UN), including USA, deliberated on the creation of an international monetary system. This system was developed with the goal of ensuring financial stability at the global level. During the Conference, members planned to establish an International Trade Organisation (ITO) to set the rules and regulations for international trade. However, the plan failed to take shape. Nevertheless, a palatable alternative was formed, also known as the General Agreement on Tariffs and Trade (GATT).

Before the World Trade Organisation was formed in 1955, the GATT played the primary role of pushing for periodic bargaining, in terms of the removal of trade barriers between member nations. The reduction in tariffs, for example, enabled freer flow of resources and commodities, raising world output and propelling growth of the global economy.

3. Establishment of an International Financial System [Bretton Woods System, 1944]
As mentioned earlier, the Bretton Woods Conference had the main aim of creating an international financial system to achieve financial stability. In the process, two financial international institutions were formed, namely the International Monetary Fund (IMF) and the World Bank.

Initially, the World Bank was named International Bank for Reconstruction and Development (IBRD). It was responsible for the provision of loans that supported post-war economic reconstruction, since the late 1940s. Subsequently, the World Bank aided developing countries in their goal of achieving economic and social progress.

As for the International Monetary Fund (IMF), its role was to provide financial support to member countries and correct temporary payment imbalances. Members could access the financial support only if they met the requirements set by the IMF Articles of Agreement, which stipulated conditions, like the need to disregard foreign exchange controls. As a result, the IMF contributed to the freer flow of currencies between countries, promoting growth.

The third notable feature of the Bretton Woods System was the gold exchange standard that facilitated foreign exchange convertibility. From 1944 (Year of the Bretton Woods Conference) to 1971, all foreign currencies were pegged to the U.S. Dollar (USD). The USD was pegged to gold, specifically 35 USD per ounce of gold. Consequently, this gold exchange standard gave rise to the creation of foreign exchange markets that led to exchange rate stability. Hence, stable currency values boosted market confidence and promoted greater trading and investment activities. As such, the Bretton Woods System contributed to the remarkable growth of the global economy.

What’s Next?
In view of the above-mentioned factors, it may appear that the seemingly-sustained period of economic prosperity could last indefinitely. However, from the 1970s onwards, the expansion and growth of the global economy began to slow down. In the next issue, we will discuss the problems of the global economy, such as the twin oil shocks of the 1970s. To support your revision, consider these questions:
– How did the United States contribute to the growth of the global economy?
– Which was more important: The Bretton Woods system or the liberalisation of world trade [to be discussed in class]

Do consider joining our JC History Tuition to create and adopt an exam-focused revision plan that will prepare you for the demands of the A Level History examinations. Rest assured, you will experience a progressive learning structure that builds up a strong foundation in the historical knowledge for the essential areas of learning. Furthermore, we conduct essay and SBQ skills development workshops that hone your answering technqiues.

On a separate but related note, our tuition centres offer GP Tuition and Economics Tuition classes as well. These programmes will be instrumental in the cultivation of reflective thinking, knowledge application and intellectual acumen. At the end of the way, our classes will prepare you for the complex but exciting future.