How did the Bretton woods system collapse giving birth to globalisation? What is the main reason behind it?
Answers
Hello..
You have to understand that the Bretton Woods system is solely propped up by the US’s economic dominance over the rest of the world, where the main purpose of the BWS is to provide fixed exchange rates and favorable conditions for growth in the Global Economy(GE) post ww2 to take place.
The idea of the BWS is to provide stable exchange rates between different currencies by fixing 35 USD to one ounce of gold.
The entire BWS came at the severe expanse of the US where by the 1960s, had started experiencing balance of payment deficits in excess of 1.5billion per year.
Coupled with the ongoing war in Vietnam that isn’t incurring huge costs, Nixon was forced to pull the plug on the BWS simply because of its unsustainable nature. This answers the first part of your answer.
As to how the BWS’s Failure led to globalization, there isn’t no direct connection as far as I can tell. Globalisation has been occurring ever since the end of WW2 and the BWS’s Failure was more of a roadblock in the road to globalisation as counteries now had to adapt a floating currency, instead of the previous stable exchanges rates pegged by the USD...
Hope it helps..❤
Answer : From first Pic to second pic
