Stanley Fischer's paper examines the role of macroeconomic factors in economic growth, using a regression analog of growth accounting. The study finds that growth is negatively associated with inflation, large budget deficits, and distorted foreign exchange markets. Supplementary evidence suggests that the causation runs from macroeconomic policy to growth. The framework identifies the channels through which these effects operate: inflation reduces growth by reducing investment and productivity growth, while budget deficits also reduce capital accumulation and productivity growth. The paper discusses exceptional cases where high growth occurred despite high inflation or large deficits, concluding that while macroeconomic stability is necessary for sustainable growth, it is not sufficient. The findings are supported by both regression evidence and case studies from Latin America, East Asia, and Africa.Stanley Fischer's paper examines the role of macroeconomic factors in economic growth, using a regression analog of growth accounting. The study finds that growth is negatively associated with inflation, large budget deficits, and distorted foreign exchange markets. Supplementary evidence suggests that the causation runs from macroeconomic policy to growth. The framework identifies the channels through which these effects operate: inflation reduces growth by reducing investment and productivity growth, while budget deficits also reduce capital accumulation and productivity growth. The paper discusses exceptional cases where high growth occurred despite high inflation or large deficits, concluding that while macroeconomic stability is necessary for sustainable growth, it is not sufficient. The findings are supported by both regression evidence and case studies from Latin America, East Asia, and Africa.