Under the Bretton Woods system, countries experiencing large and persistent current account deficits were obliged to devalue their currencies and/or take measures to cut their deficits by contracting their economies.

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This is correct. Under the Bretton Woods system, countries with large and persistent current account deficits were expected to take measures to reduce those deficits, which could include devaluing their currency or reducing their economy. This was seen as a way to promote international economic stability by preventing countries from accumulating large imbalances in trade and investment flows.

Under the Bretton Woods System, Countries Experiencing Large and Persistent