ABSTRACT
There has been no shortage of ideas and suggestions about how the international monetary system should be run. Practice has varied considerably, from the gold standard before the First World War to floating exchange rates after it and then back to the gold standard in 1925. The Second World War saw the formation of the Bretton Woods system of fixed-but-adjustable exchange rates backed by the International Monetary Fund (IMF) to aid international liquidity. In the 1960s the fixed exchange rate system came under increasing pressure and collapsed altogether at the beginning of the 1970s. The ensuing system of flexible exchange rates between the main trading countries has operated in a number of different ways since then with different levels of intervention by the authorities.
