Macroeconomic stability is a prerequisite for sustained growth from "summary" of Theory of Economic Growth by W. Arthur Lewis
Macroeconomic stability is a fundamental requirement for the long-term prosperity of an economy. Without a stable macroeconomic environment, sustainable economic growth becomes an elusive goal. This stability encompasses various aspects such as price stability, financial stability, and stable exchange rates. Price stability is crucial for businesses and consumers to make informed decisions about investments and consumption. Inflation erodes the purchasing power of money and creates uncertainty in the economy. High inflation rates can lead to distortions in the allocation of resources, as people rush to spend before prices rise further. On the other hand, deflation can have negative consequences by discouraging spending and investment, leading to a slowdown in economic activity...
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