4 
But the reader is further puzzled because on the next 
page it is shown that in order to maintain a certain 
( "desired" ) level of the real rate of interest 
(which equals the rate of profit ) the nominal rate of 
interest has to exceed the real rate by the growth 
rate of prices ( which in his example is equal to the 
growth rate of money wages ). So it appears the two main 
actors have changed places and the rate of profit is 
now acting on the nominal rate of interest! In the footnote 
on p.103 this is underlined by reference to circumstances 
"which may result in high nominal interest rates and 
rates of inflation through the policy aim of maintainigjn r^" 
( r is the real rate of interest ). 
r 
This gives me the cue for what I really want to say. 
The rate of interest is a matter of institutions and of 
policy. This, at least, is an opinion on which Sraffa 
and Keynes would have agreed! It is therefore not 
possible to make sweeping generalisations about the 
direction in which the influence goes. Whether you can 
G'Vv'v 
regard interest as an autonous force unilaterally acting 
on the profit rate , or whether you have to admit that 
the influence may work just as well in the opposite 
direction depends not on the working of an invisible 
hand but on the decisions of human policy makers. They 
are variable according to circumstances, they are liable 
to institutional changes. Traditional central banking 
policy would follow the course of the rate of profit, 
increasing interest in the boom and lowering it in the 
later phases of the recession. A Keynesian policy maker might 
CTVW 
make a more autonous policy. That is short run, Prof.Pivetti