The fund-flow approach. A critical survey

The fund-flow approach to production theory was proposed by Nicholas Georgescu-Roegen almost half a century ago and it provides a description of production as a process unfolding in time and entailing a temporal coordination between different elements. Despite the initial interest, the approach has seldom received attention by mainstream economists and it is not yet well known. The paper critically surveys Georgescu-Roegen’s model, together with: i) the later developments and modifications; ii) the recent criticisms focused on its limitations due to the instrumental assumption of constant efficiency for funds. The paper concludes by discussing the limits and comparative merits and suggesting possible applications.