capital formation

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Capital formation

Expansion of capital or capital goods through savings, which leads to economic growth.

Capital Formation

The transfer of capital from individuals, organizations, or government for business use. For example, a widget company experiences capital formation when people buy widgets. The company can then use the profit to encourage investment or to expand its operations, among other options. Capital formation is crucial to economic growth.

capital formation

The creation of productive assets that expand an economy's capacity to produce goods and services. Private savings facilitates capital formation by allowing resources to be diverted to corporate investment rather than individual consumption.

capital formation


capital accumulation

  1. the process of increasing the internally available CAPITAL of a business by retaining earnings to add to RESERVES.
  2. the process of adding to the net physical CAPITAL STOCK of an economy as a means of increasing the economy's capacity to produce goods and services. INVESTMENT by businesses in new plant and equipment is one important source of capital formation, as is investment by the government in INFRASTRUCTURE (roads, railways, etc.).

capital formation

References in periodicals archive ?
para]]-- Becomes Member of BIO's Emerging Companies and Capital Formation Committees --[[/para]]
9% on a quarterly basis, while gross fixed capital formation increased by 0.
According to the State Statistical Office data, the total value of Gross Fixed Capital Formation in the Republic of Macedonia for 2013 was 11 billion denars.
The total fixed capital formation in the extractive industry activity rose from Dh7.
Breaking through the access barrier; academic capital formation informing policy in higher education.
The indicator business investment is defined as the gross fixed capital formation by the private sector as a percentage of GDP.
But capital formation will not rise unless capital return rises, and this highlights an important policy implication.
It also offers private mergers and acquisitions and capital formation advisory for property owners seeking to enter into joint ventures with real estate developers.
As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth--particularly if one were designing a tax system from scratch--because a consumption tax is likely to encourage saving and capital formation.
Margo Thorning of the American Council on Capital Formation was a guest on "Live Chats with the Experts" on CA's GlobalWarming.
Fixed capital formation plummeted as both internal and external demand for Uruguayan goods and services dropped off in 2002.
Participants were asked to comment on issues such as capital formation, industry operating benchmarks, current strategies, and employment outlook.