Watch Video: The Bretton Woods System (8:24) and Video: Bretton Woods to Brexit: The Future of Economic Cooperation (3:05) to better familiarize yourself with the history of the Bretton Woods semi-fixed exchange rate system that prevailed for about 30 years and the reasons for which it was abandoned. With the help of the second video you should better grasp the reasons for which it is difficult for modern and advanced economies to adopt another fixed exchange rate regime, common currency included. Video: Milton Friedman on the Birth of Foreign Exchange Markets should make you appreciate the virtues of flexible exchange rates and the reasons for which they are preferred regardless of their high level of volatility. In 1-2 paragraphs, provide a summary of the concepts covered in the videos which answers the following: What was the Bretton Woods exchange rate system and why was it abandoned? Why is it difficult to for modern and advanced economies to adopt a fixed exchange rate regime? What are some of the virtues of a flexible exchange rates? https://youtu.be/wuOOK7aU1TY http://openmarkets.cmegroup.com/3998/milton-friedman-on-the-birth-of-foreign-exchange-markets
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