Financial assets enter production functions as an input alongside capital and labor

Evidence

We specify the industry-level Cobb-Douglas production function as V 5 ALaKbFg, where V denotes industry-wide total value added; A denotes total factor productivity; L denotes labor input; K denotes nonfinancial assets input; F denotes financial assets input; and a, b, and g denote, respectively, the output elasticities of labor, nonfinancial assets, and financial assets. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 225

Categorization

• XREF: Connects to functional income distribution analysis — rising financial-asset elasticity shifting income shares away from labor. — connects to: Financial capital both depends on and disciplines industrial production for returns — Clara E. Mattei, Escape from Capitalism, 419; Finance and industry form interdependent but distinct fractions of capital; Financialization both derives profits from finance and drains capital from productive investment — Natascha van der Zwan, Making Sense of Financialization, 29 (+1 more)

Related

• Financialization does not measurably raise firm profits or financial-asset productivity. (similarity 0.81)
• Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing. (similarity 0.80)
• Financialization must be measured by profit generation, not employment or output (similarity 0.80)
• Financialization marks a decisive shift from production-based to finance-driven accumulation. (similarity 0.79)
• Financial capital both depends on and disciplines industrial production for returns (similarity 0.79)
• Financialization both derives profits from finance and drains capital from productive investment (similarity 0.79)
• Financialization means accumulation through financial channels rather than production (similarity 0.79)

Broader Connections

• Financialization means accumulation through financial channels rather than production #contradicts (0.85) — Greta R. Krippner, The Financialization of the American…, 11
• Finance and industry form interdependent but distinct fractions of capital #corroborates (0.82)
• Financial capital both depends on and disciplines industrial production for returns #qualifies (0.78) — Clara E. Mattei, Escape from Capitalism, 419
• Financialization both derives profits from finance and drains capital from productive investment #expands (0.75) — Natascha van der Zwan, Making Sense of Financialization, 29