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EPRC is a leading institute in Europe for comparative research on public policy, with a particular focus on regional development policies. Spanning 30 European countries, EPRC research programmes have a strong emphasis on applied research and knowledge exchange, including the provision of policy advice to EU institutions and national and sub-national government authorities throughout Europe.

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Keynes, Sraffa and the Emergence of the General Theory

Grieve, Roy (2012) Keynes, Sraffa and the Emergence of the General Theory. Review of Political Economy. ISSN 0953-8259 (In Press)

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Abstract

This paper considers the question of whether Sraffa had any significant influence on Keynes’s thinking in the period of preparation of The General Theory. Questioning the negative view expressed by Pasinetti (2007), we suggest there is a strong possibility that Sraffa, in introducing the idea that there exist as many ‘natural’ rates of interest as there are commodities which can be lent or borrowed, was instrumental in pointing Keynes to a way of escape from the traditional ‘productivity and thrift’ conception of the rate of interest; this new line of thought Keynes developed into the liquidity preference explanation of interest on money.