The dollar's surge to a seven-year high against the yen and a two-year peak versus the euro last week may be helpful to the global economy, but then again it may not, says Mohamed El-Erian, chief economic adviser at Allianz.

"This dollar rally, the result of genuine economic progress and divergent policy developments, could contribute to the 'rebalancing' that has long eluded the world economy," he writes in an article for Project Syndicate.

"But that outcome is far from guaranteed, especially given the related risks of financial instability."

The plus side is that a rising dollar boosts the exports of the struggling economies in Europe and Japan, El-Erian explains.

On the minus side, the U.S. economy could suffer from lessened exports. "While the U.S. economy is more resilient and agile than its developed counterparts, it is not yet robust enough to be able to adjust smoothly to a significant shift in external demand to other countries," he notes.

"Furthermore, sudden large currency moves tend to translate into financial market instability," El-Erian adds.

The only way to take advantage of the dollar's appreciation "is to introduce complementary growth-enhancing policy adjustments, such as accelerating structural reforms, balancing aggregate demand and reducing or eliminating debt overhangs," El-Erian says.

"Global growth, at its current level, is inadequate for mere redistribution among countries to work. Overall global GDP needs to increase.

"The U.S. dollar's resurgence, while promising, is only a first step. It is up to governments to ensure that the ongoing currency re-alignment supports a balanced, stable and sustainable economic recovery. Otherwise, they may find themselves again in the unpleasant business of mitigating financial instability," he concludes.

Komal Sri-Kumar, president of Sri-Kumar Global Strategies, appears to agree with that prescription. The currency wars of recent years have done little to boost global economic growth, he writes in the Financial Times.

"Unfortunately, playing with exchange rates is a zero-sum game," Kumar says. "Any benefit to the depreciating country would be fleeting as trading nations fight back with similar measures."

Instead, countries should "implement structural changes that would expand world trade," he notes. "The first of these is to open market segments that were previously closed to competition."

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