Bretton Woods II

Bretton Woods II refers to a period starting in the early 2000s when major developing countries, particularly China, accumulated large dollar reserves by running trade surpluses and keeping their currencies undervalued. This strategy supported global economic growth but also created an imbalance, as U.S. debt grew significantly. Unlike the original Bretton Woods system of fixed exchange rates, Bretton Woods II is an informal arrangement characterized by these persistent surpluses and dollar dominance, influencing global finance and currency dynamics. It highlights the interconnectedness of economies and the shift in international monetary patterns post-1970s.