Devaluing to Prosperity: Misaligned Currencies and Their Growth Consequences

Hardly anyone on earth could have or would have written this fascinating book. Its combination of scholarly erudition, technical economics, and horse sense is rare enough. Throw in Bhalla’s talent with prose and his flair for being an agent provocateur, and you have something truly unique. Read it and learn. Read it and think. Read it and be provoked.

Surjit Bhalla makes a profound and important argument about the growth process and the international monetary system. The issues he raises go back to the founding of economics as a discipline, but are immediately relevant to pressing policy issues all over the world. Everyone concerned with the future of the global economy will need to consider Bhalla’s extensive arguments. Whether you agree or disagree, this is a very important book.

Surjit Bhalla presents a highly readable, topical, and provocative analysis of the role of currency misalignments buttressed by extensive empirical analysis. He argues that keeping the currency undervalued helps growth, and the effect is stronger than that of well-functioning institutions, but he also argues that misalignment creates vulnerability in the international system. The IMF must obviously look more closely into these issues in its multilateral surveillance and also in the analysis it does for the G-20.

Surjit Bhalla has written a brilliant and important book. It marshals evidence from 180 countries over 150 years to show conclusively that deliberate currency undervaluation is a powerful policy by which countries have boosted their economic growth substantially over long periods. In passing, he demolishes much theoretical conventional wisdom which denies this possibility. This superbly researched and highly readable volume is compulsory reading for all serious policy economists.

This book is a seminal contribution of Dr. Surjit Bhalla towards better understanding successful development strategies followed by 'miracle growth' economies of the 19th and 20th centuries. The book is rich in empirics as well as in high theory of non-linear dynamics of exchange rates. It is lucidly written making concepts and policy conclusions readily accessible to students as well as policy makers. We all should be grateful to Dr. Surjit Bhalla for unraveling the mystery of high growth economies.