AUTONOMOUS INVESTMENT Meaning and
Definition
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Autonomous investment refers to a specific category of investment expenditure that is independent of changes in income and other economic variables. It represents the portion of investment that is not influenced by fluctuations in business cycles, interest rates, or consumption levels.
In economic terms, autonomous investment is considered as a component of aggregate investment that is determined by factors other than the level of economic activity. This means that even in the absence of changes in income, autonomous investment would still occur.
Autonomous investment is usually associated with long-term investments made by firms and governments to expand their productive capacity, improve infrastructure, research and development activities, and purchase new equipment or technology. These investments are made based on considerations such as anticipated future demands, competitive advantages, technological advancements, and strategic decisions.
Key factors influencing autonomous investment include business expectations, investors' perceptions of future profitability and market conditions, technological innovations, and government policies.
Autonomous investment is an important indicator of an economy's capacity to sustain and promote growth over a long period. It reflects the level of confidence and belief in the future prospects of an economy, as it tends to indicate investments that are initiated without direct influence from the current economic climate.
Overall, autonomous investment plays a significant role in driving economic activity, capital accumulation, productivity improvements, and technological advancements, ultimately contributing to long-term growth and development.
Etymology of AUTONOMOUS INVESTMENT
The word "autonomous" comes from the Greek words "autos" meaning "self" and "nomos" meaning "law". It is derived from the concept of self-governance or independence.
The word "investment" is derived from the Latin verb "investire", which means "to clothe" or "to dress". In the context of finance, it means the allocation of resources in various assets or projects with the expectation of generating future income or profits.
Therefore, the term "autonomous investment" combines the idea of self-governance or self-determination with the notion of allocating resources for future gain. It refers to investment decisions made independent of changes in income or other economic factors.
