%0 Journal Article
%T Are Financial Variables Inputs in Delivered Production Functions? Are Financial Variables Inputs in Delivered Production Functions?
%A Roger Betancourt
%A Miguel Kiguel
%J Revista de An¨˘lisis Econ¨®mico (RAE)
%D 1995
%I Georgetown University, Universidad Alberto Hurtado
%X Fischer's classic (1974) paper develops conditions under which it is appropriate to use money as an input in a 'delivered' production function. In this paper, we extend Fischer's model I (the Baumol-Tobin inventory approach) by incorporating credit into the analysis. Our investigation of the extended model brings out a very restrictive but necessary implicit assumption employed by Fischer to treat money as an input. Namely. that there exists a binding constraint on the use of money! A similar result holds for our more general model. Fischer's classic (1974) paper develops conditions under which it is appropriate to use money as an input in a 'delivered' production function. In this paper, we extend Fischer's model I (the Baumol-Tobin inventory approach) by incorporating credit into the analysis. Our investigation of the extended model brings out a very restrictive but necessary implicit assumption employed by Fischer to treat money as an input. Namely. that there exists a binding constraint on the use of money! A similar result holds for our more general model.
%U http://www.rae-ear.org/index.php/rae/article/view/165