ABSTRACT
In the previous chapter the implications of the following three propositions, which are common assumptions in most post-Keynesian analyses, have been analysed in the context of growth: (1) investment is the causal determinant of output, employment and income; (2) from a macroeconomic standpoint, banks, and not savers, play the most fundamental role in the process of finance; and (3) the rate of interest may affect the investment decision and, especially, the allocation of financial wealth between different existing financial assets. The discussion of the theoretical reasoning behind, and institutional background of, these assumptions has permitted us to unveil the role of banks in a monetary production economy.
