Updated: Aug 20, 2021

This occurs when items of capital equipment – machines, buildings, vehicles, etc. – are not replaced as they wear out, so that the stock is being reduced. This is then the opposite of investment.

Reference: The Penguin Dictionary of Economics, 3rd edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.