International Monetary System:An Overview

Just as people in different countries speak different languages, they also transact business in different currencies, requiring conversion from one type of money to another. The International Monetary System comprises the set of rules and practices that govern how debts are honored and paid between and among nations with different national monies. When the system is functioning smoothly, all countries gain from international flows of goods, services, and capital the system is an int'l public good. But when it breaks down or is poorly organized, nations are unable to sustain high levels of trade and investment. The present paper reviews on history of international monetary system.