Capital Accumulation   (Capital Formation)

Capital Accumulation   (Capital Formation) is the process through which the stock of capital increases overtime for purposes of future investments.

Capital accumulation can be in form of   increased savings, resource   utilization, construction etc.  In the process  of  capital  formation,  society has  to  forego  some  of  its  present consumption  and  direct it  to increasing  the  stock  of  capital  goods  in  order  to  improve  on  the production of consumer goods in future.