autonomous consumption


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Autonomous Consumption

An expenditure that does not vary with one's income. That is, autonomous consumption is what one must spend regardless of how much money one makes. Autonomous consumption is largely fixed during certain time periods. Examples of autonomous consumption include rent or mortgage payments and debt service. If one's income is zero, then autonomous consumption is financed by spending savings or by borrowing. See also: Induced Expenditure.

autonomous consumption

that part of total CONSUMPTION expenditure that does not vary with changes in NATIONAL INCOME or DISPOSABLE INCOME. In the short term, consumption expenditure consists of INDUCED CONSUMPTION (consumption expenditure that varies directly with income) and autonomous consumption. Autonomous consumption represents some minimum level of consumption expenditure that is necessary to sustain a basic standard of living and which consumers would therefore need to undertake even at zero income. See CONSUMPTION SCHEDULE.
References in periodicals archive ?
6) Where a is autonomous consumption, b is the marginal propensity to consume, c is autonomous investment, d is the interest sensitivity of investment, e the is sensitivity of money demand to income, f is the sensitivity of money demand to the interest rate, and M is the real money supply.
The second part is an Appendix in which Harcourt explains the significance for Harrod's system of the Oxford economist's abandonment of the autonomous consumption component in the Keynesian consumption function.
One referee commented on a draft of this note that, though Keith mentioned the issue, he never discussed how crucial it was for the derivation of Harrod's result that Harrod dropped the autonomous consumption term from Keynes's consumption function.
0] is autonomous consumption, Y is aggregate income, and T is tax revenue.
is an autonomous consumption component, b is the marginal propensity to consume, T is taxes net of transfers for all levels of government, and Y is income derived from local production; in Model 1 all income generated by E accrues to local residents by assumption.
Since autonomous consumption is usually zero, consumption is therefore proportional to income.
In all equations, the autonomous consumption is insignificant, indicating the existence of a long-run consumption relationship.

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