Bretton Woods system. The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states in the mid-20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to gold and the ability of the IMF to bridge temporary imbalances of payments.
Also, there was a need to address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well. Origins[edit] Interwar period[edit] A high level of agreement among the powerful (nations) that failed to coordinate exchange rates during the interwar period had exacerbated political tensions facilitated the decisions reached by the Bretton Woods Conference. "... Opinion / Lead : New geography with old geometry. The international institutional structure has remained largely static since the mid-20th century rather than evolving with the changing power realities and challenges.
Reforming and restructuring the international system poses the single biggest challenge to preserving global peace, stability, and continued economic growth. A 21st century world cannot remain indefinitely saddled with 20th century institutions and rules. Power shifts are an inexorable phenomenon in history. The global power structure continually evolves. Although the focus currently is on the post-Cold War power changes, the Cold War era itself witnessed important shifts. For example, it was only after the Cold War began that the Soviet Union rose as a global military power, although it failed to become a true economic power. By the second half of the Cold War, Japan and Germany emerged from the ruins of World War II as formidable economic giants. Quirk of history World in transition China, the luckiest. Keynesian economics. The theories forming the basis of Keynesian economics were first presented by the British economist John Maynard Keynes in his book, The General Theory of Employment, Interest and Money, published in 1936, during the Great Depression.
Keynes contrasted his approach to the aggregate supply-focused 'classical' economics that preceded his book. The interpretations of Keynes that followed are contentious and several schools of economic thought claim his legacy. Keynesian economists often argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector, in particular, monetary policy actions by the central bank and fiscal policy actions by the government, in order to stabilize output over the business cycle.[2] Keynesian economics advocates a mixed economy – predominantly private sector, but with a role for government intervention during recessions. Overview[edit] Theory[edit] Concept[edit] Excessive saving[edit]
John Maynard Keynes. John Maynard Keynes, 1st Baron Keynes,[1] CB, FBA (/ˈkeɪnz/ KAYNZ; 5 June 1883 – 21 April 1946) was a British economist whose ideas have fundamentally affected the theory and practice of modern macroeconomics, and informed the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and is widely considered to be one of the founders of modern macroeconomics and the most influential economist of the 20th century.[2][3][4][5] His ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.
In 1999, Time magazine included Keynes in their list of the 100 most important and influential people of the 20th century, commenting that: "His radical idea that governments should spend money they don't have may have saved capitalism. "[10] He has been described by The Economist as "Britain's most famous 20th-century economist. Early life and education[edit] King's College, Cambridge. Career[edit] Macroeconomics. Circulation in macroeconomics.
Macroeconomics (from the Greek prefix makro- meaning "large" and economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. This includes national, regional, and global economies.[1][2] With microeconomics, macroeconomics is one of the two most general fields in economics.
While macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline: the attempt to understand the causes and consequences of short-run fluctuations in national income (the business cycle), and the attempt to understand the determinants of long-run economic growth (increases in national income). Macroeconomic models and their forecasts are used by governments to assist in the development and evaluation of economic policy.
Basic macroeconomic concepts[edit] Output and income[edit] Unemployment[edit] Main article: Unemployment IS–LM[edit] 1.