The Latin American Structuralist School

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.

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