Autonomous consumption

Updated: Aug 20, 2021

That part of consumption which does not depend on current income.

Autonomous consumption

a > 0 because even those with no income need to consume to live, and can finance expenditure by running down assets or borrowing. The level of a is influenced by total assets held, expectations of future income or acquisitions of assets through legacies, and social conventions about minimal acceptable standards of living.

Reference: Oxford Press Dictonary of Economics, 5th edt.

Sources & references
Risk disclaimer
James Knight
Editor of Education
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.