Title: International Monetary System | Empire Resume
Headings: What is the International Monetary System?
What is the International Monetary System?
History
Bretton Woods
International Monetary System
Currency Regimes
Fixed Exchange Rates
Fixed Exchange Rates: Pros & Cons
Flexible Exchange Rates
Flexible Exchange Rates: Pros & Cons
Euro
Euro Benefits
Euro Problems

Content: Some drawbacks of flexible exchange rates are the creation of potentially unstable conditions where instability and uncertainty may exist. Another drawback is that flexible exchange rates can cause extreme fluctuations in imports/exports and undermine the economic stability of a nation. Flexible exchange rates also expose itself to inflationary risk due to the exchange depreciation on the nation’s price level. Euro
In the 19 th and early 20 th centuries, the British Empire dominated the world and the British Pound was the primary currency that was used in international trade. During the decline of the British Empire in the middle-half of the 20 th century, the U.S. dollar became the leading currency and reigned for over 50 years. On January 1, 1999, the Euro was created and originally replaced the national currency of 11 European nations. Euro Benefits
The positive corollaries from adopting the Euro included smoother business operations, since imports and exports between Eurozone nations were no longer subjected to fluctuating exchange rates. Additionally, tourism significantly increased since members of the Eurozone would now be able to travel to multiple locations within the Eurozone without having to exchange their currencies on a frequent basis. Another less concrete but still apparent benefit was the pride among nations in being part of a larger group with one unified currency. The Euro has proven itself as a successful currency and has resulted in booming exports for powerhouse and peripheral countries and low interest rates for many years.