1. Lessons from Inter-War Economic Experiences 💡📉

• Economists and politicians realized that an industrial society based on mass production could not thrive without mass consumption. ⚙️💸
• For mass consumption to be possible, there had to be high and stable incomes for the population. 💰
• Stable incomes were directly linked to steady, full employment, but markets alone couldn’t ensure that employment would remain steady. 🏭💼
• To achieve and maintain economic stability, governments needed to minimise fluctuations in prices, output, and employment. 📊⚖️

2. Role of Governments in Economic Stability 🏛️⚖️

• The government was expected to step in and intervene to maintain economic stability in the economy. 🏛️💼
• Achieving full employment and stable incomes was not possible unless the government played an active role. 📉🔧
• Governments had to regulate markets to prevent instability in the economy and to control fluctuations in prices and output. ⚙️📈

3. Economic Links with the Outside World 🌍💵

• To achieve full employment, countries needed the ability to control the flow of goods, capital, and labor across their borders. 🌎🔄
• National economies required control over international economic connections to ensure their economic stability. 💼💳
• Governments had to manage external economic relationships in a way that protected and stabilized their domestic economies. 🌍📉

4. The Bretton Woods Conference 🏛️🌏

• The Bretton Woods Conference took place in July 1944 in New Hampshire, USA to create a new global economic system after the war. 🗓️🇺🇸
• The conference aimed to ensure global economic stability and promote full employment around the world. 🌍💼
• The framework established at Bretton Woods became the foundation for the international economic system that shaped the post-war world. ⚖️

5. Creation of the IMF and World Bank 💰🏦

• The IMF (International Monetary Fund) was established to manage the external surpluses and deficits of member nations. 🌍💵
• The World Bank, also known as the International Bank for Reconstruction and Development (IBRD), was created to finance post-war reconstruction efforts in war-torn countries. 🏗️💰
• Together, the IMF and World Bank are known as the Bretton Woods Institutions or the Bretton Woods Twins. 🌎🔗

6. Bretton Woods System and the International Monetary System 💱🌐

• The Bretton Woods system was built on the idea of fixed exchange rates, where national currencies were pegged to the US dollar. 💵🔗
• The US dollar was tied to gold, with a fixed price of $35 per ounce of gold. 🏅💎
• The IMF and World Bank had significant control over the global economy, with the US having veto power over crucial decisions in both institutions. 🇺🇸🗳️