analytical foundations. the result was a critique of the neoclassical theory of value, which was the consensus doctrine of the day. his analysis contradicts the marxian labour theory of value. like keynes, sraffa distinguishes the share of output that remunerates capital from the interest rate. he mentions the possible influence of the rate set by the central bank on the rate of profit. sraffa ’ s production of commodities by means of commodities was not published until 1960, after more than three decades of intense work to make sure of the logical and mathematical consistency of his theory. it was published in english and an italian version was brought out almost simultaneously. the new theory triggered lively debate. one of sraffa ’ s students, luigi pasinetti, crossed swords, successfully, with two eminent representatives of neoclassical economics, solow and samuelson, my own professors. another of his students, pierangelo garegnani, continued to elaborate sraffian capital theory. he is now working on the complete edition of sraffa ’ s papers, still largely unpublished, with support from the bank of italy. in 1965 - 66, in his course on “ advanced economic theory ”, samuelson described sraffa ’ s work with the greatest respect and linked it to the great school of thought beginning with quesnay ’ s tableau economique and continuing, three centuries later, with leontief ’ s input - output tables and linear programming. professor samuelson reaffirmed this judgment in an article in the corriere della sera of 6 september 1983 on the occasion of sraffa ’ s death, with the statement that if his work had been published a decade or two earlier it would have exerted a powerful influence on the subsequent development of economic theory by leontief, von neumann, knight and koopmans. professor pasinetti has extended sraffa ’ s theoretical vision to the analysis of economic development. so far, to my knowledge, this has had limited application to current economic events. i should like, instead, to put forward the hypothesis that it can be of considerable help in understanding several important phenomena of our age. sraffa ’ s model is an analytical interpretation of subsistence, of the conditions for the existence and survival of an economic system. the relationships between the quantities of commodities produced and used for production and prices must correspond to certain conditions connected with technical relationships. the model offers a new view, which also differs from

mario draghi : interview with cnn interview by mr mario draghi, governor of the bank of italy, with cnn, at the world economic forum, davos, 2 february 2009. * * * introduction by richard quest : a european country that is struggling in the throes of recession is italy where business sentiment has fallen in january for the eighth month running. it is now at its lowest level on record. mario draghi is the governor of the bank of italy and he is also the chairman of the financial stability forum. last week i spoke to him at the world economic forum in davos. it was clear that we had to understand and i needed to understand from him the situation that we face. a i think it ’ s worthwhile speaking of what ought to be done rather than how the situation stands. i think the first consideration is speed is of the essence. all governments in the world have designed something, have thought about something, but only very few of them have actually done something. so i think the general consensus of …, i mean here, but i should say everywhere, is that fiscal packages that are large, that are lasting, and broad - based are key to the recovery and i think that ’ s … and they should be speedily implemented. q well the problem with what you ’ ve just said is no - one will disagree with you but it ’ s taking a very long time to get that activity under way. i ’ ll give you an example. subprime was august 07. the freezing of markets was july to september 08. we are january 09 and we have had bailouts but not really much stimulus package yet. a unfortunately the same thing happened with the great depression. the first signs of the great depression started a few years, several years before actual fiscal action had been implemented. so we don ’ t want to repeat that mistake. i think we have reached the stage where i would say most governments are ready to act and overall consensus is there. so it ’ s time to move now. on the monetary front however, i don ’ t want to stay only with the fiscal side, on the monetary front i think the response by central banks has been prompt and massive and has certainly been very effective. but it ’ s clear that now there isn ’ t much room left to go to have lower interest rates. and also one should keep in mind that monetary policy takes time to produce its effects and it does produce its effects only through the banking