The Collapse of the Bretton Woods System in the Early 1970s Contributed Positive Impact to International Political Economy
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Abstract
The article aims to analyze the impact after the collapse of Bretton Woods system under the liberal’s ideology in order to understand how the Bretton Woods system can affect on global economy. The world had undergone substantial changes in the economic arena since the collapse of Bretton Woods system. The fixed exchange rate system was replaced by floating system. In liberal’s ideology, the new exchange rate system was a good element to flourish its ideology. However, this also brought about some negative factors as can be seen from the increase in the number of speculators and the impact on capital mobility.
The result of the study views the demise of the Bretton Woods system in a positive light from a liberal theory viewpoint- as the greater degree of cooperation between states had done a great deal to decrease possibility of recurring economic crises. If there was still a ‘Bretton Woods’ system the global economy would be less international cooperation under a fixed-rate system, and everything would still depend on the decisions of the U.S.
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References
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