Rejecting neoclassical notions of supply and demand, Sraffa demonstrated that relative prices are determined by the profit rate. However, a Sraffa model fails to explicitly describe the determination of output, growth, and accumulation. Rao closes this model with a monetary sector, and examines...

This policy paper is part of a discussion series on subject of growth and economic performance at the New Zealand Ministry of Economic Development in 2004. It provides a brief view of growth and social change taken from the perspective of market process theory in order to establish the following...