Net Capital Formation

Net Capital Formation

The transfer of capital from individuals, organizations, or governments for business use after deductions for depreciation. For example, a widget company experiences capital formation when people buy widgets. It calculates its net capital formation by deducting the depreciation on its widget-manufacturing equipment.
References in periodicals archive ?
The incremental net capital formation to GDP ratio is expected to increase by 1.
The finding from Tables 1 and 2 is that net capital formation is well below the share of capital in the net national product.
Abstract: In The General Theory Keynes used data from an NBER study by Simon Kuznets to present gross and net capital formation for the United States.
In The General Theory Keynes used data from the National Bureau of Economic Research's Bulletin 52, Gross Capital Formation, 1919-1933, by Simon Kuznets to present gross and net capital formation for the United States from 1925 to 1933 (Keynes 1974, pp.
The entrepreneurs' servicing, repairs, maintenance, depreciation, and depletion figures that Keynes used to derive the net capital formation figures were for business investment only, though.
Includes net capital formation assistance to persons,
A country in which gross capital formation is equal to calculated depreciation and therefore results in no net capital formation would nevertheless reap economic growth from the substitution of new technology for old.
A large part of the blame for the low rate of net capital formation during the 1973-89 period is placed on the relatively low return on capital.
Include net capital formation assistance to persons, businesses