Capital Formation
Capital Formation refers to the process of building up a stock of capital assets, which are essential for economic growth. This involves the accumulation of physical assets like machinery, buildings, and infrastructure, as well as financial assets such as investments and savings. Capital formation is crucial for businesses to expand and innovate, leading to increased productivity and job creation.
The process typically involves savings from individuals and businesses being channeled into investments. Governments may also play a role by providing incentives or creating a favorable environment for investment. Overall, capital formation is a key driver of economic development and prosperity.