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Wealth (economics)

 

 
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Wealth (economics)
 
 
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In economics
Economics

File:Ballard Farmers' Market - vegetables.jpgEconomics is the Social sciences that studies the Production theory basics, Distribution , and Consumption of Good and Service ....
 and business
Business

A business is a legally recognized organization designed to provide good s and/or Service to consumers. Businesses are predominant in capitalism economies, most being privately owned and formed to earn profit that will increase the wealth of its owners....
, wealth
Wealth

Wealth is an abundance of valuable material possessions or resources. The word is derived from the old English wela, which is from an Indo-European word stem....
 (or net worth
Net worth

In business, net worth is the total assets minus total outside liability of an individual or a company . For a company, this is called shareholders' equity and may be referred to as book value....
) of a person or nation is the value of asset
Asset

In business and accounting, assets are everything of value that is owned by a person or company. It is a claim on the property your income of a borrower....
s owned net of liabilities
Liability

In the most general sense, a liability is anything that is a wikt:hindrance, or puts individuals at a disadvantage. It can also be used as a slang term to describe someone that puts a team or group of which they are a member at a disadvantage, and would thus be better off without....
 owed (to foreigners in the case of a nation) at a point in time. The assets include those that are tangible (land
Land (economics)

In economics, land comprises all natural resource whose supply is inherently fixed such as any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum....
 and capital
Capital (economics)

In economics, capital or capital goods or real capital refers to factors of production used to create goods or services that are not themselves significantly consumed in the production process....
) and financial (money, bonds, etc.). Wealth may be measured in nominal or real values
Real versus nominal value

In economics, nominal value refers to any price or value expressed in money of the day, as opposed to real value, which adjusts for the effect of inflation....
. Measurable wealth typically excludes intangible or nonmarketable assets such as human capital
Human capital

Human capital refers to the stock of skills and knowledge embodied in the ability to perform Labour so as to produce economic value. It is the skills and knowledge gained by a worker through education and experience.Many early economic theories refer to it simply as labor, one of three factors of production, and consider it to be a fungible...
 and social capital
Social capital

Social capital is a concept developed in sociology and also used in business, capital , organizational behaviour, political science, public health and natural resources management that refers to connections within and between social networks as well as connections among individuals....
. In economics, 'wealth' corresponds to the accounting term 'net worth
Net worth

In business, net worth is the total assets minus total outside liability of an individual or a company . For a company, this is called shareholders' equity and may be referred to as book value....
'.






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In economics
Economics

File:Ballard Farmers' Market - vegetables.jpgEconomics is the Social sciences that studies the Production theory basics, Distribution , and Consumption of Good and Service ....
 and business
Business

A business is a legally recognized organization designed to provide good s and/or Service to consumers. Businesses are predominant in capitalism economies, most being privately owned and formed to earn profit that will increase the wealth of its owners....
, wealth
Wealth

Wealth is an abundance of valuable material possessions or resources. The word is derived from the old English wela, which is from an Indo-European word stem....
 (or net worth
Net worth

In business, net worth is the total assets minus total outside liability of an individual or a company . For a company, this is called shareholders' equity and may be referred to as book value....
) of a person or nation is the value of asset
Asset

In business and accounting, assets are everything of value that is owned by a person or company. It is a claim on the property your income of a borrower....
s owned net of liabilities
Liability

In the most general sense, a liability is anything that is a wikt:hindrance, or puts individuals at a disadvantage. It can also be used as a slang term to describe someone that puts a team or group of which they are a member at a disadvantage, and would thus be better off without....
 owed (to foreigners in the case of a nation) at a point in time. The assets include those that are tangible (land
Land (economics)

In economics, land comprises all natural resource whose supply is inherently fixed such as any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum....
 and capital
Capital (economics)

In economics, capital or capital goods or real capital refers to factors of production used to create goods or services that are not themselves significantly consumed in the production process....
) and financial (money, bonds, etc.). Wealth may be measured in nominal or real values
Real versus nominal value

In economics, nominal value refers to any price or value expressed in money of the day, as opposed to real value, which adjusts for the effect of inflation....
. Measurable wealth typically excludes intangible or nonmarketable assets such as human capital
Human capital

Human capital refers to the stock of skills and knowledge embodied in the ability to perform Labour so as to produce economic value. It is the skills and knowledge gained by a worker through education and experience.Many early economic theories refer to it simply as labor, one of three factors of production, and consider it to be a fungible...
 and social capital
Social capital

Social capital is a concept developed in sociology and also used in business, capital , organizational behaviour, political science, public health and natural resources management that refers to connections within and between social networks as well as connections among individuals....
. In economics, 'wealth' corresponds to the accounting term 'net worth
Net worth

In business, net worth is the total assets minus total outside liability of an individual or a company . For a company, this is called shareholders' equity and may be referred to as book value....
'. But analysis may adapt typical accounting conventions for economic purposes in social accounting (such as in national accounts
National accounts

National accounts or national account systems provide a complete and consistent conceptual framework for measuring the economic activity of a nation ....
). An example of the latter is generational accounting
Generational accounting

Generational accounting is a method of accounting for redistribution of lifetime tax burdens across generations from social insurance, including social security and social health insurance....
 of social security
Social security

Social security primarily refers to a social insurance program providing social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others....
 systems to include the present value
Present value

Present value is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk....
 projected future outlays considered as liabilities.

Economic terminology distinguishes between two types of variables: a stock and a flow. Wealth, as measurable at a date in time, is a stock
Stock and flow

Economics, business, accounting, and related fields often distinguish between quantities which are stocks and those which are flows. A stock variable is measured at one specific time, and represents a quantity existing at that point in time, which may have been capital accumulation in the past....
, like the value of an orchard on December 31 minus debt owed on the orchard. For a given amount of wealth, say at the beginning of the year, income from that wealth, as measurable over say a year is a flow
Stock and flow

Economics, business, accounting, and related fields often distinguish between quantities which are stocks and those which are flows. A stock variable is measured at one specific time, and represents a quantity existing at that point in time, which may have been capital accumulation in the past....
. What marks the income as a flow is its measurement per unit of time, like the value of apples yielded from the orchard per year.

See also

  • Distribution (economics)
    Distribution (economics)

    Distribution in economics refers to the way total Output or income is distributed among individuals or among the factors of production . In general theory and the national income and product accounts, each unit of output corresponds to a unit of income....
  • Distribution of wealth
    Distribution of wealth

    Distribution of wealth is a comparison of the wealth of various members or groups in a society. It differs from the distribution of income in a manner analogous to the difference between position and speed....
  • Income
    Income

    Income, refers to consumption opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received......
    , including section Meaning in economics and use in economic theory
    Income

    Income, refers to consumption opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received......
  • National accounts
    National accounts

    National accounts or national account systems provide a complete and consistent conceptual framework for measuring the economic activity of a nation ....
  • Wealth effect
    Wealth effect

    The wealth effect is an economic term, referring to an increase in spending that accompanies an increase or perceived increase in wealth....
  • Wealth elasticity of demand
    Wealth elasticity of demand

    Wealth elasticity of demand in microeconomics is the relation of the Proportionality change in consumption of a good to a proportional change in Wealth ....