capital accumulation

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capital accumulation

see CAPITAL FORMATION.

capital accumulation

or

capital formation

  1. 1the process of adding to the net physical CAPITAL STOCK of an economy in an attempt to achieve greater total output. The accumulation of CAPITAL GOODS represents foregone CONSUMPTION, which necessitates a reward to capital in the form of INTEREST, greater PROFITS or social benefit derived. The rate of accumulation of an economy's physical stock of capital is an important determinant of the rate of growth of an economy and is represented in various PRODUCTION FUNCTIONS and ECONOMIC GROWTH models. A branch of economics, called DEVELOPMENT ECONOMICS, devotes much of its analysis to determining appropriate rates of capital accumulation, type of capital required and types of investment project to maximize ‘development’ in underdeveloped countries (see DEVELOPING COUNTRY). In developed countries, the INTEREST RATE influences SAVINGS and INVESTMENT (capital accumulation) decisions, to a greater or lesser degree, in the private sector (see KEYNESIAN ECONOMICS) and can therefore be indirectly influenced by government. Government itself invests in the economy's INFRASTRUCTURE. This direct control over capital accumulation, and the indirect control over private investment, puts the onus of achieving the economy's optimal growth path on to the government. The nature of capital accumulation (whether CAPITAL WIDENING or CAPITAL DEEPENING) is also of considerable importance. See also CAPITAL CONSUMPTION, INVENTION, INNOVATION, CAPITAL-OUTPUT RATIO.
  2. the process of increasing the internally available CAPITAL of a particular firm by retaining earnings to add to RESERVES.
References in periodicals archive ?
Like economists and others before and after, Marx claimed that the accumulation of capital was the watchspring of wealthy modernity.
Consider: 'a rise in the price of labor, as a consequence of [the] accumulation of capital, only means, in fact, that the length and weight of the golden chain the wage-worker has already forged for himself, allow of a relaxation of the tension of it' (618).
This regional history makes it possible to conclude that, with mining, the people of Antioquia developed technical skills; with trade, they established ties with the world market and developed a vision of the marketplace and business management; with colonization came transportation and the coffee culture, the accumulation of capital, and formation of the local market.
Capitalists have to compete for the accumulation of capital.
She outlined her own theory in two books, The Accumulation of Capital (1913) and the AntiCritique (published posthumously in 1921), in which she replied to critics of the first.
Looking set to continue, at least for a while, China's bull market is well supported by the accumulation of capital in the country.
The editors claim that the essays demonstrated that the three modalities of suburban governance introduced in the first chapter--state-led, accumulation of capital, and authoritarian and private --"are present, to varying degrees in each of the regional cases studied" (p.
Although these two narratives specify different initial shocks, the subsequent channel is common to both: accumulation of capital through investment leading to growth in capital income, because the rising quantity of capital is not fully offset by a fall in the returns per unit of capital.
ySTANBUL (CyHAN)- Economists have long known that the main driving force behind improvements in wealth is advances in productivity, while the accumulation of capital alone plays a relatively smaller role in improving living standards.
The 12 essays offer discussions on a range of topics, including Karl MarxAEs schemes of reproduction, a reappraisal of the Kalecki and Luxemburg discussion on schemes of reproduction, Luxemburg as an economist, contrasting Marx and Luxemburg with Plekhanov and Lenin, KowalikAEs reading of the Accumulation of Capital, and more.
The vast accumulation of capital led to a hitherto undreamt of scale of investment in shipbuilding, outfitting, manufacture, invention and on and on; without setting out to do so, the small island nation found itself running a global empire on which the sun never set'.
As a result, investment as a share of output rose from less than 10% in 1960 to over 40% in the mid-1980s, leading to large accumulation of capital and skilled labor.