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International Monetary Fund

BIBLIOGRAPHY the world. Voting rights are allocated in proportion to the
American Marketing Association. (1995). Dictionary of market- quota subscription.
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NTC Business Books.
Bennett, Roger, and Blythe, Jim (2002). International marketing: HISTORICAL DEVELOPMENT
Strategy planning, market entry and implementation (3rd ed.). The Depression in the 1930s devastated international
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Coughlan, Anne T., et al. (2006). Marketing channels (7th ed.). confidence in the paper money used in international
Upper Saddle River, NJ: Pearson/Prentice Hall. trade, there was an intense demand to convert paper
Czinkota, Michael R., and Ronkainen, Ilkka A. (2004). Interna- money into gold—a demand beyond what the treasuries
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Western.
of their currency in terms of a given amount of gold were
Doole, Isobel, and Lowe, Robin (2004). International marketing unable to meet the conversion demand and had to aban-
strategy: Analysis, development and implementation (4th ed.).
Stamford, CT: Thomson Learning. don the gold standard. Valuing currencies in terms of
given amounts of gold, however, had given currencies sta-
Joshi, Rakesh Mohan (2005). International marketing. New York:
Oxford University Press. ble values that made international trade flow smoothly.
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(5th ed.). Upper Saddle River, NJ: Prentice Hall. products became confused. Some nations hoarded gold to
Keegan, Warren J., and Green, Mark C. (2005). Global market- make their currency more valuable so that their producers
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Kotler, Philip, and Keller, Kevin (2006). Marketing management: desperate for foreign sales of their goods, engaged in com-
Analysis, planning, implementation, and control (12th ed.). petitive devaluations of their currencies. World trade
Upper Saddle River, NJ: Pearson Prentice Hall. became difficult. Countries restricted the exchange of cur-
Lascu, Dana-Nicoleta (2005). International marketing (2nd ed.). rency, and even encouraged barter. In the early 1940s
Cincinnati: Atomic Dog. Harry Dexter White (1892–1948) of the United States
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(8th ed.). Fort Worth, TX: Dryden. Kingdom proposed the establishment of a permanent
international organization to bring about the cooperation
of all nations in order to achieve clear currency valuation
Shaheen Borna
and currency convertibility as well as to eliminate prac-
tices that undermine the world monetary system.
Finally, at an international meeting in Bretton
INTERNATIONAL Woods, New Hampshire, in July 1944, it was decided to
create a new international monetary system and a perma-
MONETARY FUND
nent international organization to monitor it. Forty-four
The International Monetary Fund was established to fos- countries agreed to cooperate to solve international trade
ter international trade and currency conversion, which it and investment problems, setting the following goals, for
does through consultation and loan activities. When it the new permanent, international organization:
was created in 1946, the IMF had thirty-nine member
countries. By November 1999 membership in the IMF • Unrestricted conversion of currencies
had grown to 182 member countries and by the mid- • Establishment of a value for each currency in rela-
2000s membership included every major country, the for- tion to others
mer communist countries, and numerous small countries.
The only exception were Cuba and North Korea. • Removal of restrictive trade practices
To join the IMF, a country must deposit a sum of
money called a quota subscription, the amount of which CREATION OF THE
is based on the wealth of the country’s economy. Quotas INTERNATIONAL MONETARY
are reconsidered every five years and can be increased or FUND
decreased based on IMF needs and the prosperity of the In 1946 in Washington, D.C., the international organiza-
member country. In 2005, the United States contributed tion to monitor the new international monetary system
the largest percentage of the annual contributions—18 came into existence—the International Monetary Fund
percent—because it had the largest, richest economy in (IMF). The purposes of the IMF are as follows:

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