FACTOID # 2: Puerto Rico has roughly the same gross state product as Montana, Wyoming and North Dakota combined.
 
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Encyclopedia > Wealth (economics)

In economics wealth of a person or nation is the value of assets owned minus the value of liabilities owed (to foreigners in the case of a nation) at a point in time. The assets include those that are tangible (land and capital) and financial (money, bonds, etc.). As a matter of ease in measurement, intangible assets such as human capital and social capital are typically excluded. In a narrow economic usage, 'wealth' can be construed as synonymous with the accounting term 'net worth'. But analysis may adapt typical accounting conventions for economic purposes in social accounting (such as in national accounts). An example of the latter is generational accounting of social security systems to include the present value projected future outlays considered as liabilities. This article or section does not cite its references or sources. ... Wealth from the old English word weal, which means well-being or welfare. The term was originally an adjective to describe the possession of such qualities. ... In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ... In the most general sense, a liability is anything that is a hindrance, or puts individuals at a disadvantage. ... Land in economics comprises all naturally occurring resources whose supply is inherently fixed (i. ... Capital has a number of related meanings in economics, finance and accounting. ... Human capital is a way of defining and categorizing the skills and abilities as used in employment and as they otherwise contribute to the economy. ... Social capital is a core concept in business, economics, organizational behaviour, political science, and sociology, defined as the advantage created by a persons location in a structure of relationships. ... It has been suggested that Accounting scholarship be merged into this article or section. ... Net worth (sometimes net assets) is the total assets minus total liabilities of an individual or company. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... Social security primarily refers to a field of social welfare concerned with social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment, families with children and others. ... The present value of a single or multiple future payments (known as cash flows) is the nominal amounts of money to change hands at some future date, discounted to account for the time value of money, and other factors such as investment risk. ...


Economic terminology distinguishes between two types of variables: a stock and a flow. Wealth, as measurable at a date in time, is a stock, like the stock of apple trees in an 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. What marks the income as a flow is its measurement per unit of time, like the number of apples yielded from the orchard per year. In economics, the distinction is often made between stock magnitudes and flow magnitudes. ...


See also

Distribution in economics is the way total output and income from it is distributed among individuals and among factors of production (such as between labor and capital) (Samuelson and Nordhaus, 2001, p. ... Differences in national income equality around the world as measured by the national Gini coefficient. ... Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ... Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ... Wealth effect is the name in economics for spending rising with wealth. ... Wealth elasticity of demand in microeconomics is the proportional change in the consumption of a good caused by unanticipated net wealth changes (as opposed to changes in personnel income). ...

References

  • Laurence J. Kotlikoff, 1987, ‚Äúsocial security," The New Palgrave: A Dictionary of Economics, v. 4, pp. 413-18. Stockton Press.
  • _____, 1992, Generational Accounting. Free Press.
  • Nancy D. Ruggles (1987). "social accounting," The New Palgrave: A Dictionary of Economics, v. 3, pp. 377-82, esp. p. 380.
  • Paul A. Samuelson and William D. Nordhaus (2004, 18th ed.). Economics, "Glossary of Terms."
  • Adam Smith (1776). The Wealth of Nations.
  • Partha Dasgupta (1993). An Inquiry into Well-Being and Destitution. (Pub. description)

 
 

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