Abstract: Keynesian Economics It refers to the body of ideas
inspired by the British economist John Maynard Keynes
(1883–1946) particularly as set out in the General
Theory of Employment, Interest and Money in which he
argued that it was the duty of governments to achieve
and maintain full employment. In the economic
development literature, his ideas are used to justify state
intervention in the economy due to the existence of
market failures and the limitations of markets for
achieving certain developmentalist goals.
Neoclassical Economics It originates largely from
the writings of Alfred Marshall (1842–1924) and was
subsequently developed in the twentieth century by
John Hicks and Paul Samuelson, among many others. It
believes in the economic rationality of individuals and in
the efficiency of free markets. It argues against state
intervention in markets (with some exceptions) as this
leads to inefficiency and lower rates of economic growth.
Today the term neoliberalism is more commonly used to
refer to the promotion of free market economic policies.
Terms of Trade An index calculated by dividing an
index of export prices by an index of import prices. It
measures the purchasing power of exports in terms of
imports.
Publication Year: 2009
Publication Date: 2009-01-01
Language: en
Type: article
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