capital formation wikipedia - EAS
- Capital formation is a term used to describe the net capital accumulation during an accounting period for a particular country. The term refers to additions of capital goods, such as equipment, tools, transportation assets, and electricity. Countries need capital goods to replace the older ones that are used to produce goods and services.www.investopedia.com/terms/c/capital-formation.asp
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Capital formation is a concept used in macroeconomics, national accounts and financial economics. Occasionally it is also used in corporate accounts. It can be defined in three ways: It is a specific statistical concept, also known as net investment, used in national accounts statistics,
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See moreIn the national accounts (e.g., in the United Nations System of National Accounts and the European System of Accounts) gross capital formation is the total value of the gross fixed capital formation (GFCF), plus net changes in inventories,
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See moreThe use of the terms "capital formation" and "investment" can be somewhat confusing, partly because the concept of capital itself can be understood in different ways.
• Firstly, capital formation is frequently thought of as a measure...
See moreA method often used in econometrics to estimate the value of the physical capital stock of an industrial sector or the whole economy is the so-called
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See moreIn economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e., after deduction of
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See moreCapital formation is notoriously difficult to measure statistically, mainly because of the valuation problems involved in establishing what the
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See moreAccording to one popular kind of macro-economic definition in textbooks, capital formation refers to "the transfer of savings from households and governments to the business sector, resulting in increased output and economic expansion" (see Circular flow of income).
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