capital account

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Related to Capital account surplus: Capital account deficit

Capital account

Net result of public and private international investment and lending activities.

Capital Account

A calculation of the amount of money coming into and going out of a country. The capital account is calculated by netting the public and private investments within the country with those the government and domestic companies are making outside the country. For example, one must net the foreign direct investment in the country with the FDI the government and businesses are making in other countries to come up with part of the calculation of the capital account. Other inputs into the capital account include (but are not limited to) bank accounts and changes in the amount of domestic and foreign holders of stocks, bonds, and currencies.

capital account

  1. 1the section of the NATIONAL INCOME ACCOUNTS that records INVESTMENT expenditure by government on infrastructure such as roads, hospitals and schools; and investment expenditure by the private sector on plant and machinery.
  2. the section of the BALANCE OF PAYMENTS
accounts that records movements of funds associated with the purchase or sale of long-term assets and borrowing or lending by the private sector.
References in periodicals archive ?
Capital inflows - a capital account surplus - are useful because they permit a nation to consume more and grow faster by borrowing against future income.
Figure 4 shows that Mexico's capital account surplus did peak in the first quarter of 1994, coinciding with the implementation of NAFTA.

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