Macroeconomic Policy Interactions -How Evolving Institutions Have Shaped Outcomes
November 2024 2024-12-11 15:54Authors
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Macroeconomic Policy Interactions -How Evolving Institutions Have Shaped Outcomes
Abstract
| This chapter explores how macroeconomic strategic policy interactions changed over time with shifting political and economic dynamics since the start of Egypt’s economic transition in the 1970s until today. Drawing on existing scholarly literature such as the traditional Tinbergen Economic Policy models, strategic gaming approaches and dynamic stochastic general equilibrium (DSGE) models, the chapter provides an in-depth analysis of how monetary-fiscal-financial policy interactions have shaped macroeconomic outcomes. The institutional framework is key in understanding the effectiveness of policy synchronization and the consequent outcomes. Thus, throughout the analysis, we discuss the evolving role of fiscal, monetary, financial and political institutions and how de jure institutions compare to de facto practices in Egypt. We also discuss how credibility, political cycles, monetary and fiscal rules have influenced macroeconomic policy interactions, and consequently outcomes, in the mentioned period. |
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