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 ?
Summary: New Delhi [India], Aug 11 (ANI): If India opts for sovereign borrowing in foreign currency, the move should be accompanied by a well-crafted policy and special safeguard as the foreign exchange reserve is an accumulation of capital account surplus rather than current account, according to India Ratings and Research (Ind-Ra).
Once this is established, business owners generally see reduction in debt and accumulation of capital.
Without a doubt, the desperation, internecine modus operandi and Machiavellian predilection of the political class propelled by its practiced prebendal proboscis for the primitive accumulation of capital has remained the fons et origo of the deprecable carnage that has visited our chequered electoral peregrination.
class="MsoNormalWhen workers contribute to a pension fund, there is an accumulation of capital that, if well invested, can have a positive effect on retirees' welfare.
They also provide a unique way to facilitate savings and investments, he said, pointing out that Waqf is a tool that can be used to achieve greater benefits for the society as a whole, based on cutting off part of the consumer resources and turning them into productive and developing assets that would essentially increase the accumulation of capital in the economy.
At the end of the final chapter, 'Unsettled Will: Culture and Scottish Independence', Cairns claims, rather provocatively, that 'the accumulation of capital is not as important to the nation as the accumulation of cultural capital' (p.
As you need capital to have factories and industrial establishments, the idea of a "primitive" or original accumulation of capital seemed reasonable to many.
This reduces the margin of expenditure that could be used for the accumulation of capital stock to strengthen the foundations of the economy.
Human capital is clearly the single most important species of capital in modern economies, and the rise of the middle class in the twentieth century proves that it is also significant for understanding the accumulation of capital and concentration of wealth going forward.
Certainly, the hypothesis of an independent net savings rate is in itself doubtful, but even if Piketty were right in assuming that capitalists' net saving rate is constant and independent of general economic conditions, their unlimited propensity to accumulate new capital would not necessarily guarantee them a larger portion of NDP because the progressive accumulation of capital can also negatively affect the net rate of return of that capital.
It is then a question of introducing Tunisia into an area of AaAaAeAcAaAaAeA AaAaAeAcAaAaAeA that does not require a prior accumulation of capital stocks that we do not have.
Like economists and others before and after, Marx claimed that the accumulation of capital was the watchspring of wealthy modernity.