Next, we have to introduce retained profits and interest payments tothe rentiers’ households into the saving function of the model. In order tokeep the argument simple, we assume a classical saving hypothesis againand hold that workers do not save. The part of profits retained by firms iscompletely saved by definition. The part of profits distributed to rentiers’households, the interest payments, however, is used by those householdsaccording to their propensity to save (s R ). Therefore, total saving (S) comprises retained profits (P 2 R) and saving out of interest income (S R ).Taking equations (9.1), (9.5) and (9.7) into account, we get for the savingrate (s), which relates total saving to the nominal capital stock: