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 1.5pc because of CPEC', he said.
The finding from Tables 1 and 2 is that net capital formation is well below the share of capital in the net national product.
As in the SNA, this account derives net lending or net borrowing for the sector by subtracting net capital formation (fixed investment) (line 32) from net saving and capital transfers (line 29).
As in the SNA, the value is equal to the sum of the net capital formation, net lending or net borrowing, "other changes in volume," and nominal holding gains or losses.
In figure 3 we show gross and net fixed capital formation for the sector as proportions of GDP, with gross capital formation as a proportion of GDP at its lowest since 1994 and net capital formation at its lowest since 1996.
In the capital account, net lending/net borrowing is measured as net saving and capital transfers less net capital formation, based on the NIPAs and ITAs, adjusted to eliminate several inconsistencies.
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.
(3.)Includes net capital formation assistance to persons,
Despite the theoretical advantages of the use of net capital formation, much empirical research, especially that involving comparisons among many countries, has concentrated on gross capital formation, a tradition that goes back to Kuznets (1937).
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.
(3.)Include net capital formation assistance to persons, businesses