Autonomous investment

Updated: Aug 20, 2021

That portion of total investment which is not determined by economic factors such as the rate of interest, the rate of change of sales or the profitability of investment, hut rather by factors which can be considered exogenous to the economic system. An example could be investmerit which is carried out to take· advantage of some innovation or technical discovery. The importance of autonomous investment in economic theory is that changes ·in it may spark off economic fluctuations, and may influence the behaviour of the trade cycle in ways which are not explained by models based on explanations of investment in terms of endogenous factors (rate of interest, rate of change of sales, etc.).

Reference: The Penguin Business Dictionary, 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.