Typically, economic capital is calculated by determining the amount of capital that the firm needs to ensure that its realistic balance sheet stays solvent over a certain time period with a pre-specified probability.
The balance sheet, in this case, would be prepared showing market value (rather than book value) of assets and liabilities.
The first accounts of economic capital date back to the ancient Phoenicians, who took rudimentary tallies of frequency and severity of illnesses among rural farmers to gain an intuition of expected losses in productivity.
1800s: Martineau · Tocqueville · Marx · Spencer · Le Bon · Ward · Pareto · Tönnies · Veblen · Simmel · Durkheim · Addams · Mead · Weber · Du Bois · Mannheim · Elias In social science, economic capital is distinguished in relation to other types of capital which may not necessarily reflect a monetary or exchange-value.
Non-economic forms of capital have been variously discussed most famously by sociologist Pierre Bourdieu.