What does capital formation mean?

Definitions for capital formation
cap·i·tal for·ma·tion

This dictionary definitions page includes all the possible meanings, example usage and translations of the word capital formation.


  1. Capital formation

    Capital formation is a concept used in macroeconomics, national accounts and financial economics. Occasionally it is also used in corporate accounts. It can be defined in three ways: ⁕It is a specific statistical concept used in national accounts statistics, econometrics and macroeconomics. In that sense, it refers to a measure of the net additions to the capital stock of a country in an accounting interval, or, a measure of the amount by which the total physical capital stock increased during an accounting period. To arrive at this measure, standard valuation principles are used. ⁕It is used also in economic theory, as a modern general term for capital accumulation, referring to the total "stock of capital" that has been formed, or to the growth of this total capital stock. ⁕In a much broader or vaguer sense, the term "capital formation" has in more recent times been used in financial economics to refer to savings drives, setting up financial institutions, fiscal measures, public borrowing, development of capital markets, privatization of financial institutions, development of secondary markets. In this usage, it refers to any method for increasing the amount of capital owned or under one's control, or any method in utilising or mobilizing capital resources for investment purposes. Thus, capital could be "formed" in the sense of "being brought together for investment purposes" in many different ways. This broadened meaning is not related to the statistical measurement concept nor to the classical understanding of the concept in economic theory. Instead, it originated in credit-based economic growth during the 1990s and 2000s, which was accompanied by the rapid growth of the financial sector, and consequently the increased use of finance terminology in economic discussions.

How to pronounce capital formation?

How to say capital formation in sign language?


  1. Chaldean Numerology

    The numerical value of capital formation in Chaldean Numerology is: 6

  2. Pythagorean Numerology

    The numerical value of capital formation in Pythagorean Numerology is: 2

Examples of capital formation in a Sentence

  1. The SEC:

    To grant a stay now would thwart Congress’s goal of increasing capital formation opportunities.

  2. Boyden Gray:

    We were all set to do it in 1991, and it would have dramatically accelerated economic activity and venture capital formation.

  3. Jamie Dimon:

    If you've got to raise taxes, do it on the income of the wealthy, like a Buffett type of tax. That will be far more effective in growing the economy than taxing primary capital formation.

Translations for capital formation

From our Multilingual Translation Dictionary

  • పెట్టుబడులTelugu
  • دارالحکومت تشکیلUrdu

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"capital formation." Definitions.net. STANDS4 LLC, 2023. Web. 10 Jun 2023. <https://www.definitions.net/definition/capital+formation>.

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