After World War II international agreements comprising the Bretton Woods system formally restored foreign central banks' ability to exchange United States dollars for gold at a fixed price. World trade growth increasingly stressed this system, which was abandoned in the Nixon shock of 1971. Attempts to reform the Bretton Woods system quickly proved unworkable and failed. All modern currencies thus became fiat currencies freely floating and subject to market forces despite capital controls imposed by some central banks, with gold as a commodity.
After World War II international agreements comprising the Bretton Woods system formally restored foreign central banks' ability to exchange United States dollars for gold at a fixed price World trade growth increasingly stressed this system, which w.as abandoned in the Nixon shock of 1971 Attempts to reform the Bretton Woods system quickly proved unworkable and failed. All modern currencies thus became fiat currencies freely floating and subject .to market forces despite capital controls imposed by some central banks, with gold as a commodity.