Global economy timeline

July 1944

Bretton Woods conference

BWC outcome

Creation of IMF(1947) and International Bank for Reconstruction and Development(1946)

Creation of BWS

BWS

US dollar fixed to gold at a rate of US$35 to one ounce, other currencies fixed to USD, currencies can be adjusted, member currencies remained within 1% of declared parity

January 1946

France creates Planning Commission and diverts investment to coal, electricity, steel, cement, transport and agricultural machinery

March 1947

Truman’s address at Baylor University

First IMF financial transaction

US $25million drawing by France in May 1947

June 1947

Proposal of Marshall Plan by USoS George Marshall

GATT signed by 23 contracting parties

30th October 1947

1st Jan 1948

Provisional application of GATT

GATT

Multilateral framework to progressively lower trade barriers. Agricultural, textiles and non-tariff barriers remained less liberalised

3rd April 1948

US Congress approves of Marshall Plan

Marshall Plan

USD 13.3b billion provided in grants and loans to European nations for reconstruction efforts, slated to end in 1952.

Recipients of Marshall Plan

UK- 3.2b, France- 2.7b, West Germany- 1.4b.
Aggregate output increased by roughly 15-25% between 1948 to 1952

April 1948

Organisation for European Economic Cooperation was established to coordinate aid allocation and national recovery plans

4 April 1949

Formation of NATO with US, Canada and 10 WE states, committing members to collective defence under Article 5.

1949-1950

Programmes to provide developing countries with economic aid are launched, signaling cooperation between international organisations

Examples of Programmes to provide developing countries with economic aid

UN Technical assistance Program, US Point 4 Programme, Colombo plan for commonwealth nations

1949

Dodge Line established, fixes yen at 360 to 1 USD

1950

US begins to intentionally run BOP deficits to flow dollars abroad, providing necessary liquidity for global economy

25th June 1950

Korean War Begins

July 1950

European payments Union begins

European Payments union

made European currencies more transferable through multilateral clearing

18 April 1951

Treaty of Paris is signed, establishing European Coal and Steel community. ECSC will become part of the EU

1951

Japan launches Eximbank and Japan Development bank, providing state-backed loans to domestic firms for reconstruction

1951

US signs Mutual defense pact with Japan

Effect of US-JP mutual defense pact

Enables Japanese government to keep military spending under 1% of GNP and prioritise Industrial development

25 March 1957

Treaty of Rome, further integration of Western European markets

1 January 1958

Creation of EEC via ToR

International development association created as an arm of WB to provide soft loans to 3rd world countries

1960

December 1960 Japan

Income doubling plan launched: targeted 7.2 annual growth Real GNP grows 10.6% annually. Goal achieved by 1967

Value of non-communist merchandise rises from US$53 billion to US$112 billion

1948 to 1960

1964-1967

Kennedy round (62 participants) reduces tariffs on many industrial products by about 1/3

1964

Move of Labour intensive activities offshore

1965

Growth of four tigers of Asia (SK, HK, SG, TW)

1966 TW

Taiwan creates its first EPZ in Kaohsiung to attract FDI

1966 JP

Japanese expansion of Official Development Assistance, extends credits to Thailand and Malaysia +Establishing Asian Development Bank

Mid 1960s MNCs

13% of France’s industrial workforce was employed by AMNC affiliates

1968 MNCs an

Texas instruments opens a semiconductor assembly plant in Singapore, extending export manufacturing into developing Asia

1968

Japan overtakes West Germany to become the worlds 2nd Largest capitalist economy by total GNP

1969

MNCs account for 30% of world production

1970s

JP and WE economies have caught up with US, overvalued USD and undervalued yen and deutschemark

1950 to 1970

WE share of world trade increases from 15% to 28%

1971

US records its first BOT deficit since 1893

15 August 1971 - 1973

Nixon Shocks, ending convertibility of USD into gold (BWS fixed e/r system)

December 1971

Smithsonian agreement, attempted to save mixed e/r system by devaluing the dollar

1972

57/100 of the world’s largest economic entities (by sales or GDP) were corporations

February 1973

second devaluation of the USD, major nations begin shifting to floating e/r regimes

1973

OPEC oil crisis