ABSTRACT
Tobin takes the concept of the required rate of profits as the key variable in modern Keynesian growth models.3 In order to forge a place for portfolio balance in the analysis, money is introduced to compete with the required rate of profit on physical capital for a place in households’ portfolio holdings. ‘In a closed economy clearly the important stores of value are monetary assets. It is their yields which set limits on the accept able rates of return on real capital and on the acceptable degree of capital intensity’.4
