Brief notes on Autonomous and Accommodating items

ADVERTISEMENTS:

For properly understanding the structure of balance of payments we should have clear under­standing of autonomous and accommodating items.

(i) Autonomous items:

Autonomous items in the BOP mean those items, which are motivated by profit consideration. Therefore, those items relating to international economic transaction which are motivated by profit consideration are autonomous item such as import and export of goods and services and inflow and outflow of capita items.

ADVERTISEMENTS:

Autonomous items are independent of the state of the country’s balance of payments. These items are also called as above the line items in BOP accounts.

(ii) Accommodating item:

Accommodating items are those items which correct disequilibrium in the balance of payments. BOP accounts may reflect deficit or surplus. We know these situations are corrected by the government by injecting or withdrawing funds.

These transactions pertain to funding or withdrawal from the official reserve system using gold, special drawing rights and foreign exchange reserves.

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