What does autarky refer to in economic terms?

Autarky refers to a situation in which a country or region relies entirely on its own resources and does not participate in international trade. This means that it attempts to produce everything it needs within its own borders, avoiding imports and exports entirely. This self-sufficiency can arise from various economic policies or circumstances, leading to a domestic economy that operates independently of global markets.

This concept is significant in economic discussions because it highlights the trade-offs of isolationism versus globalization. In a state of autarky, a nation's economy may face limitations in variety, efficiency, and innovation, as it does not benefit from the comparative advantages that international trade provides. The contrast with high trade or unrestricted imports aptly illustrates why relying solely on domestic production can be less advantageous compared to participating in global trade networks.