Emerging markets have shown remarkable resilience to risk-off shocks in recent years. While favorable external conditions—good luck—contributed to this resilience, improvements in policy frameworks—good policies—played a critical role in bolstering the capacity of emerging markets to withstand risk-off shocks. Evidence suggests that monetary policy implementation and credibility have improved, with central banks becoming less sensitive to fiscal pressures and relying less on foreign exchange interventions. Central banks also hold sway over domestic borrowing conditions, although spillovers from US monetary policy remain influential. On the fiscal side, countercyclicality and responsiveness to sustainability concerns have increased, though borrowing costs remain elevated in high-debt environments. Looking ahead, emerging markets with strong monetary, macroprudential, and fiscal frameworks are better positioned to navigate risk-off shocks because they benefit from easier policy trade-offs and face a lower risk and severity of capital flow reversals. In contrast, countries with weaker frameworks should avoid delaying monetary tightening when price pressures emerge, as doing so typically results in de-anchoring of inflation expectations and larger output losses. Foreign exchange interventions provide temporary relief, but they are costly. Stronger policy frameworks lessen both reliance on—and the need for—such measures. Given uneven cross-country progress and the erosion of fiscal buffers in some cases, continued efforts to strengthen policy frameworks, safeguard central bank independence, and rebuild fiscal space remain essential, as the external environment could deteriorate rapidly.