Under Bretton-Woods, when the Fed inflated the dollar a portion of the new money would be acquired and held by foreign central banks who could then inflated their currencies proportionately. The pegged exchange rates were a gauge by which officials could tell whether or not a country had over- or under-inflated relative to dollar inflation. The IMF served as the enforcement wing of the system imposing “austerity” programs on over-inflating countries and extending them loans to make sure that U.S. banks would be paid regardless of the financial distress their profligate ways generated.
3. As long as foreign countries did not redeem dollars for gold in the U.S., the U.S. gained from the system. It could inflate without currency devaluation (since foreign currencies were inflated proportionately) or significant domestic price inflation (since dollars were held overseas). In the system, both the IMF and the World Bank extend loans. Officially, the IMF loans are short-term to help countries with balance-of-payments or exchange rate problems while the World Bank makes long-term loan for capital projects.
4. There are different types of deflation. There is the forced monetary deflation of central banks, which harms economic efficiency. Then there is the market correction of a previous monetary inflation, which helps restore economic efficiency. Then there is so-called “growth deflation” in which prices decline as production of goods expands more than production of money. This, too, helps efficiency. Take a look at Joe Salerno’s article:
2. It might be the case that the regulation changed from the writing of one book to the other.
1. SDRs were introduced near the end of the Bretton-Woods system to increase the reserve positions of countries participating in the IMF. This was an effort to replace the gold being drained from the system through dollar redemption.