The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Assets and Liabilities

  • Kenneth E. Boulding
Reference work entry


Assets and liabilities come into prominence when double-entry bookkeeping and the balance sheet were invented, a prerequisite for the development of complex market economies. Production is a function of the size and structure of real assets, including human capital. We derive more satisfaction from the use of assets rather than from their consumption. Like any business, the household has a balance sheet of assets and liabilities. The lack of capital accounting in government means that many of its activities have no real ‘bottom line’, and their value is usually assessed in noneconomic terms, sometimes resulting in catastrophic mistakes of judgement.


Assets and liabilities Balance sheet Bank deposits Bankruptcy Capital accounting Depreciation Double-entry bookkeeping Equity Fixed capital Great depression Household capital Human capital Net national product Working capital 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Kenneth E. Boulding
    • 1
  1. 1.