**1. Introduction**

Macroeconomic policy formulation and implementation are crucial for creating the enabling environment for wide-ranging economic activities to drive economic growth, which manifests into increase in the outputs of major sectors of an economy. A multiple sector positive performance is essential for the growth of the overall economy, but a sector of the economy that attracts large spectrum of economic activities can stimulate the productivity of other sectors to achieve strong sustainable growth of the economy. It is assumed that if an economy is not achieving high growth as expected, it is due to market imperfections, likely coming from economic distortions that emanate from such sources as government tax policies, human capital externalities and information spill overs. The distortions prevent the best use of economic resources (i.e., efficiency) by hindering the free flow of economic activities, thus the economy performs at levels far below its potential.

Based on the balanced growth path principles of the standard growth analysis, which assumes that economic growth on balanced path is equal to the rate of asset accumulation, growth is a function of the difference between the expected returns to asset accumulation and the opportunity cost of investing those assets from the perspective of private economic agents. Low growth rate is due to low social returns or high cost of capital (investment) or both. Increase in private investment leads to increase in capital accumulation to stimulate growth of the economy. Therefore, holding all things constant, economies with high level of private investments tend to achieve high growth and vice versa, but distortions could lead to high cost to discourage investments, thereby stifling growth even with high investments.

Different economies have peculiar conditions and therefore likely to have different critical growth determinants and constraints even though certain factors such as property rights, the rule of law, market-oriented incentives, sound money and sustainable public finance are universally applicable to all economies. The purpose of this introductory chapter is to generate insights into salient issues from standard economic growth analysis to develop macroeconomic policy perspectives therefrom. In subsequent sections, the convergence of standard growth analysis is presented, followed by macroeconomic policy implications and completing with a section on summary and conclusions.
