Business, Legal & Accounting Glossary
Autarky defines the state of an economy, which is self-reliant and does not participate in trade, or transact with other economies. Autarky refers to a closed economy, which relies on its own resources and is not affected by influences outside the economy.
The word autarky is of Greek origin and is often confused with the term autarchy, which means self-government.
One of the primary characteristics of autarky is to colonize neighbouring countries to increase their resources. In former ages, autarkies were more prominent than the present time. Italy, under the rule of Mussolini, called itself an autarky although, it continued to trade with Germany. In the present day, North Korea follows a government ideology of Juche or self-sufficiency, which is a form of autarky. However, it is involved in trade transactions with Japan and the People’s Republic of China.
There had been several autarkies in history.
Some notable examples may be mentioned as below:
Free trade may be defined as an economic system whereby there is a steady and uninterrupted sequence of trading and other commercial activities between two economies. A very important pre-requisite of free trade is the absence of any form of governmental restrictions.
In economics, a trade bloc may be defined as a substantial area where free trade practices have been adopted. Trade blocs are normally results of a number of tax, trade and tariff agreements. A major example of a trade bloc is the North American Free Trade Agreement.
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This glossary post was last updated: 29th March, 2020 | 2 Views.