Nixon shock
E48745
The Nixon shock was a series of unexpected economic measures in 1971, most notably ending the U.S. dollar’s convertibility to gold and imposing wage and price controls, which effectively dismantled the Bretton Woods system and reshaped the global monetary order.
Observed surface forms (2)
| Surface form | Occurrences |
|---|---|
| Nixon dollar shock | 1 |
| Nixon economic shock | 1 |
Statements (50)
| Predicate | Object |
|---|---|
| instanceOf |
economic policy decision
ⓘ
historical event ⓘ monetary reform ⓘ |
| alsoKnownAs |
Nixon shock
ⓘ
surface form:
Nixon dollar shock
Nixon shock ⓘ
surface form:
Nixon economic shock
|
| announcedBy | Richard Nixon ⓘ |
| announcedIn | televised address to the nation ⓘ |
| announcementDate | 1971-08-15 ⓘ |
| consequence |
collapse of the Bretton Woods fixed exchange rate system
ⓘ
devaluation of the U.S. dollar relative to other major currencies ⓘ end of the post–World War II gold exchange standard ⓘ reshaping of the international monetary system ⓘ transition to floating exchange rates ⓘ |
| country |
United States of America
ⓘ
surface form:
United States
|
| decade | 1970s ⓘ |
| domesticGoal |
combat inflation
ⓘ
improve U.S. trade balance ⓘ reduce unemployment ⓘ |
| effectOnBrettonWoodsSystem |
dismantled
ⓘ
ended fixed exchange rate regime based on gold and the U.S. dollar ⓘ |
| followedBy | Smithsonian Agreement ⓘ |
| historicalContext |
Cold War
ⓘ
post–World War II economic order ⓘ |
| internationalReaction |
concern among U.S. allies
ⓘ
negotiations leading to the Smithsonian Agreement ⓘ |
| introducedMeasure |
10 percent import surcharge
ⓘ
90-day wage and price freeze ⓘ end of dollar convertibility into gold for foreign governments ⓘ |
| legalInstrument | Executive authority of the President of the United States ⓘ |
| longTermImpact |
entrenchment of fiat currency system
ⓘ
greater exchange rate volatility ⓘ increased autonomy of national monetary policy ⓘ |
| mainComponent |
import surcharge
ⓘ
suspension of dollar convertibility to gold ⓘ wage and price controls ⓘ |
| monetarySystemAffected | Bretton Woods system ⓘ |
| policyType |
fiscal policy
ⓘ
incomes policy ⓘ monetary policy ⓘ |
| positionOfAnnouncer | President of the United States ⓘ |
| predecessorSystem |
Bretton Woods system
ⓘ
surface form:
Bretton Woods gold exchange standard
|
| reason |
U.S. balance of payments problems
ⓘ
declining U.S. gold reserves ⓘ inflationary pressures in the United States ⓘ speculative attacks on the U.S. dollar ⓘ |
| sectorAffected |
U.S. domestic economy
ⓘ
global financial markets ⓘ international trade ⓘ |
| televisedAddressTitle | Address to the Nation Outlining a New Economic Policy ⓘ |
| year | 1971 ⓘ |
Referenced by (3)
Full triples — surface form annotated when it differs from this entity's canonical label.
this entity surface form:
Nixon economic shock
this entity surface form:
Nixon dollar shock