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851. Keynes’s finance, the monetary and demand-led circuits: a Sraffian assessment

Working Paper n.851 - Marzo 2021

Sergio Cesaratto

DEPS, USiena

Riccardo Pariboni

DEPS, USiena


This paper aims to stimulate the convergence of the Sraffian approach to demand-led growth theory with insights from monetary circuit theory and stock-flow models. The first Sraffian contribution to this convergence we identify is the extension of Garegnani’s interpretation of Keynes’ General Theory’s originality and limitations to Keynes’ 1937 papers on “finance.” In both cases, it is a question of freeing Keynes from the ties of marginalist theory. After discussing some troubles of the monetary circuit, we identify a complementarity between the Keynesian concept of finance, some insights of the monetary circuit, and the role attributed by the Sraffian take of demand-led growth to the autonomous components of demand (which are also Kalecki’s external markets). This seems to us to be the second Sraffian contribution to this convergence towards a monetary theory of demand-led growth.


Keynes, Finance, Monetary Circuit, Effective Demand, Supermultiplier

Jel Codes

B26, E12, E43, E50