criticisms, Anatole Kaletsky has described Sargent and Wallace's proposition as a significant contributor to the displacement of Keynesianism from its role as the leading economic theory guiding the governments of advanced nations. Reception While the policy-ineffectiveness proposition has been debated, its validity can be defended on methodological grounds. To do so, one has to realize its conditional character. For new , countercyclical stimulation of aggregate demand through monetary policy instruments is neither possible nor beneficial if the assumptions of the theory hold. If expectations are rational and if markets are characterized by completely flexible nominal quantities and if shocks are unforeseeable white noises, then macroeconomic systems can deviate from the equilibrium level only under contingencies (i.e. random shocks). However, no systematic countercyclical monetary policy can be built on these conditions, since even monetary policy makers cannot foresee these shocks hitting economies, so no planned response is possible. According to the common and traditional judgement, new classical macroeconomics brought the inefficiency of economic policy into the limelight. Moreover, these statements are always undermined by the fact that new classical assumptions are too far from life-world conditions to plausibly underlie the theorems. So, it has to be realized that the precise design of the assumptions underlying the policy-ineffectiveness proposition makes the most influential, though highly ignored and misunderstood, scientific development of new classical macroeconomics. New did not assert simply that activist economic policy (in a narrow sense: monetary policy) is ineffective. Robert Lucas and his followers drew the attention to the conditions under which this inefficiency probably emerges. See also Neutrality of money Sticky wages and prices Related theories Ricardian equivalence Say's law Treasury view References Further reading Macroeconomic theories Macroeconomic policy New classical macroeconomics