The premise of this paper is that in a monetary production economy, policy decisions of the central bank, or more generally the 'monetary authority', set the tone not only for nominal interest rates but also for 'real' interest rates defined in the usual way. This is a different question than that of which institution(s) acquire the status of monetary authority at any particular stage of socioeconomic or technological development. Rather the suggestion is that the existence of some such social structure is a prerequisite if anything resembling capitalist monetary production is to be viable. The paper demonstrates that a coherent macroeconomic theory can be elaborated on this basis, including an explanation of economic growth, the business cycle, inflation, the functional distribution of income, the 'Keynesian' problem of the impact of demand growth on economic growth, endogenous money, cumulative causation, and endogenous technical change. (author's abstract) / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"