Definition of Nixon shock:
Nixon Shock is a phrase used to describe the aftereffect of a set of economic policies touted by former President Richard Nixon in 1971. Most notably, the policies eventually led to the collapse of the Bretton Woods system of fixed exchange rates that went into effect after World War II.
A phrase that is used to describe the measures taken in 1971 by former US president, Richard Nixon to tackle the 1970 inflation. The measures included a 10% import tax, a 90-day freeze on price and wages and most importantly, the closing of the gold window that ended the convertibility of US dollar into gold. This had the greatest impact on the Bretton Woods system, which lead to its end.
Nixon Shock followed President Nixon’s televised New Economic Policy address to the nation. The crux of the speech was that the U.S. would turn its attention to domestic issues in the post-Vietnam War era. Nixon outlined three main goals for the plan: creating better jobs, stemming the rise in cost of living, and protecting the U.S. dollar from international money speculators. .
How to use Nixon shock in a sentence?
- The Nixon Shock was the catalyst for the stagflation of the 1970s as the U.S. dollar devalued.
- The Nixon Shock was an economic policy shift undertaken by President Nixon to prioritize the United States' economic growth in terms of jobs and exchange rate stability.
- The Nixon Shock effectively led to the end of the Bretton Woods Agreement and the convertibility of U.S. dollars into gold.
Meaning of Nixon shock & Nixon shock Definition