Capital Accumulation: Analyzing Its Role in Economic Growth and Social Inequality

Introduction

Capital accumulation is a fundamental concept in economics, referring to the process through which wealth—often in the form of physical assets, financial resources, or human capital—grows over time. This report will explore the dual role of capital accumulation in facilitating economic growth and exacerbating social inequality. Through an examination of historical and contemporary evidence, it will become clear that while capital accumulation can drive economic development, it also has complex implications for income distribution and social equity. The primary purpose of this report is to analyze these dynamics, shedding light on the interplay between capital accumulation, economic progress, and social disparity.

The Role of Capital Accumulation in Economic Growth

Capital accumulation is often viewed as a cornerstone of economic growth. According to classical economic theories, increased capital investment leads to enhanced productivity, which, in turn, fosters innovation and economic expansion.