Intermediate goods in the production function

[jdebacker]

Do we want to include intermediate goods in the firm's production functions? The input-output matrix, $\Pi$ does approximate this by turning output goods into consumption goods.

But intermediate goods directly in the production function might allow for some more responses of output to commodity prices and more realistic modeling of tradable intermediate goods.

Do we think intermediate goods should be modeled in firm production directly?

cc @rickecon