formuen

Formue is a term used in Norwegian and Danish to denote the net wealth of an individual, household, or nation. It represents the total value of all assets minus all liabilities at a given point in time, and is distinct from income, which measures flows of money over a period.

Components: Formue comprises financial assets such as cash, deposits, stocks, bonds, and pension rights; and non-financial assets such as real estate, vehicles, art, and other valuables. Liabilities include mortgages, loans, and other debts. The resulting figure is net worth.

Measurement and scope: For individuals, net worth is a snapshot that can change with asset prices, savings, earnings, and debt. At the national level, wealth includes produced capital, natural resources, and built infrastructure, in addition to financial assets, and is used to assess long-term economic strength, living standards, and wealth distribution.

Distribution and dynamics: Wealth distribution is often more unequal than income distribution, with a small share of households holding a large portion of total wealth. Key drivers include inheritance, saving behavior, investment returns, asset price movements, and fiscal policy.

Policy relevance: Debates around wealth center on taxation, inheritance or estate taxes, capital gains taxation, and housing policy, as well as the role of pensions and social insurance in shaping lifetime wealth. Data sources include national statistical agencies and international organizations, which publish figures on net worth and wealth inequality.