Capital (in economics) refers to either equipment used to produce goods (tools, factory buildings, infrastructure) or
money that is currently used to pay for business ventures. Capital accounts refers to the balance of investment that a
country receives from, or supplies to, other countries over the course of a business period. So, for example, in the course of a year the people in
country A may buy $
1.
5 million in shares and bonds from overseas, and sell $900,000 of the same (for net capital exports of $600K); meanwhile, foreigners might buy $1.2 million in shares, etc., while selling $800K of the same (capital imports of $400K). The
country therefore exports $600K, imports $400K, and runs a net capital account balance of -$200K.
Over the short run, a capital account surplus can offset a current account deficit.