WHAT is the end of Bretton …

End of Bretton Woods and the Beginning of 'Globalisation' : 
(i) After 1960s, US was no longer the dominant economic power as it had been for more than two decades. The US dollar now no longer commanded confidence as the world's principal currency. The dollar could not maintain its value in relation to gold. Eventually leading to the collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates. 
(ii) From the mid-1970s the international financial system also changed. Developing countries were forced to borrow from Western commercial banks and private lending institutions. This led to periodic debt crisis in the developing world, and lower incomes and increased poverty, especially in Africa and Latin America. 
(iii) The industrial world was also hit by unemployment that began rising from the mid-1970s and remained high until the early 1990s. From the late 1970s, MNCs also began to shift production operations to low-wage Asian countries. 
(iv) New economic policies in China and the collapse of the Soviet Union and Soviet style communism in Eastern Europe brought many countries back into the fold of the world economy. Wages were relatively low in countries like China. They became attractive destinations for investment by foreign MNCs competing to capture world markets. 
(v) The relocation of industry to low-wage countries stimulated world trade and capital flows. Countries such as India, China and Brazil have undergone rapid economic transformation.