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 ?
Growth was driven mostly by physical capital accumulation at 2.
Rapid capital accumulation has also reflected infrastructure upgrades.
When individuals save more and invest directly in projects, there results capital accumulation and economic growth.
Ball suggests that recessions sharply reduce capital accumulation, have long-term effects on employment--largely through lower labor force participation--and may slow the growth of total-factor productivity.
Unfree labour was and remains central to global capital accumulation.
This creates one of the most powerful capital accumulation machines on the globe," Schorsch said, when the Cetera deal was announced earlier this year.
The thematic chapters on Asian development challenges discuss institutions and governance, infrastructure, productivity and capital accumulation, savings and investment, finance, and the Association of Southeast Asian Nations and investment treaties.
Our estimates are derived using WHOs EPIC model of economic growth, which focuses on the negative effects of NCDs on labor supply and capital accumulation.
We are delighted to repeat the special dividend paid in Q4 2012 as earnings and capital accumulation have remained above targeted levels.
Central elements of capitalism include capital accumulation, competitive markets and wage labor.
Fostering investment and capital accumulation in new and innovative sectors that use existing domestic human resources and skills can help unleash Lebanon's potential for growth, and over the long-term shift the economy toward a more sustainable growth path,"said Ferid Belhaj, World Bank country director for the Mashreq region.
She is a development economist studying the determinants of and returns to human capital accumulation (health and education) and technology adoption among self-employed households in sub-Saharan Africa.

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