In contrast to a general production function, Corrado’s model seeks to measure output
by considering a world of three goods: consumption C, tangible investments I, and
intangibles N. The model treats intangible expenditures as investments that must be capitalized. In addition, when intangibles are regarded as intermediate goods, labour L
and tangible capital K are allocated to the production of all three goods. Intangibles N
are an input to consumption C and investments I. The production functions and flow
accounts for each of the three sectors are thus as follows: