Bretton Woods System

The Bretton Woods System was an international monetary framework established in 1944 to promote global economic stability. It set up fixed exchange rates where currencies were linked to the US dollar, which in turn was backed by gold. This system aimed to facilitate international trade and prevent competitive devaluations. It worked well until the 1970s when the US gold supply couldn't support the dollar, leading to the system's collapse. Essentially, Bretton Woods created a structured way for countries to manage exchange rates to maintain economic stability after World War II.