Macroeconomic Reforms and Resilience: International Experience and Egypt Specifics

The Great Recession of 2007-10 provides an excellent opportunity to take stock of the extent to which the macroeconomic reforms of the last two decades have indeed helped to reduce macroeconomic vulnerability among emerging and developing economies

Author(s): Peter J. Montiel

Publication Number: ECES-DLS31-E

 and thus helped those economies become more resilient in the face of shocks, permitting us to draw lessons for countries such as Egypt that are relative latecomers to the reform process. Not only did this recession generate a series of particularly severe shocks for emerging and developing economies, but intriguingly, it has been unique among recent recessions in that international recovery has actually been led by such economies. The key question to be addressed in this paper concerns the extent to which this growth resilience among emerging and developing economies can be attributed to the macroeconomic reforms that these countries implemented prior to the outbreak of the recession in 2007, and if so, what this tells us about desirable features of the future path of reform in Egypt.