Sraffa's suggestion regarding the monetary determination of the rate of profits raises two fundamental questions addressed by this paper: (i) can the money rates of interest be envisaged as variables set by the financial system independently of the real sector of the economy? (ii) How can they...

A profit-making financial system is introduced into the Pasinetti model of growth and distribution with the aim of showing that Pasinetti's formulation implicitly incorporated a well-defined theory of finance. In a golden age, the financial sector must set the rates of interest below the rate of...