Egypt has recently shifted to a monetary policy framework that focuses on price stability. In this edition of the distinguished lecture series, John B. Taylor, a world-renowned scholar in monetary economics, explains how emerging markets made the transition from using the exchange rate as a nominal anchor to inflation targeting. To this end, he emphasizes the importance of adopting a clear monetary rule to guide expectations, arguing that the alleged trade-off between price stability and unemployment is not supported by recent evidence. With respect to Egypt, Dr. Taylor particularly applauds the recent developments in monetary policy and the current reform efforts to put Egypt on a path of sustainable growth with lower inflation. At the same time, he points out the need for more reform efforts, especially in areas of financial sector reform, deficit reduction, and privatization of state-owned enterprises.