However important a role liquidity preference may play in Keynes’ monetarytheory, it is entirely immaterial to his theory of effective demand. What thistheory requires, as far as the rate of interest is concerned, is not that the rateof interest is determined by liquidity preference, but that it is determined exogenously with respect to the income generation process. Whether, in particular,liquidity preference, or anything else determines it, is entirely immaterial.(Pasinetti 1974, p.47, emphasis in the original)