What you’ll learn to do: describe the basic tenets of new classical economics

Many contemporary macroeconomic models use rational expectations and Ricardian Equivalence theories in their predictions of future economic trends.

New Classical Economics is a neoclassical perspective that makes a stronger case for the ineffectiveness of fiscal & monetary policy to stabilize the economy. This case is based on two beliefs that are unique to New Classical Economics: the theories of rational expectations and Ricardian Equivalence.