Talk:Capital formation

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The whole "Wrong Definition" section misses the point of the macro-economic definition. Cash and Equity in businesses - self-financing - is fundamentally obtained by individuals - consumers and households. Similarly, financial institutions rely on consumers for deposits, and businesses for deposits (and business rely on consumers). So at the end of the day, all source financing comes from households and individuals.

Secondly, the whole section seems to be opinion. Albeit valuable and insightful, asset and securities speculation constitutes capital formation for other businesses, and while each move may not directly expand the economy, the net effect is expansion of the economy, thus "macro" economics. -Avery F

I tend to agree with you Avery. However, I found the section to be very important because it addresses the problem that saving and investment as defined by economics are often misunderstood by some (if not most) economist and other people (including me).

[edit] Capital formation and Investment

I miss one important point in the article: Is Capital formation equal what would in macroeconomics be Investment and thus equal to what would be called in macroeconomics savings?