Since 2004, economic reforms in Egypt have led to robust expansion, a healthy external position, and enhanced investor confidence. But despite these positive macroeconomic developments, inflation has been steadily rising. Does fiscal policy threaten price stability? Does wage growth in the Egyptian economy lead price inflation, or is it the reverse? In this volume, these and other questions are examined by contributors who participated in a conference held in Cairo in late 2007. Here is an analysis of the factors driving prices in Egypt, in an attempt to find a satisfactory balance between pri ... More

Since 2004, economic reforms in Egypt have led to robust expansion, a healthy external position, and enhanced investor confidence. But despite these positive macroeconomic developments, inflation has been steadily rising. Does fiscal policy threaten price stability? Does wage growth in the Egyptian economy lead price inflation, or is it the reverse? In this volume, these and other questions are examined by contributors who participated in a conference held in Cairo in late 2007. Here is an analysis of the factors driving prices in Egypt, in an attempt to find a satisfactory balance between prices and economic growth. While Egypt is the focus of the analysis, the papers draw upon the relevant literature and international experience, and the findings can be applied to other middle-income economies. The study helps to explain the complex issues facing economists and policymakers, with proposals for reform.