New Classical Economics is a school of thought that emerged in the 1970s, emphasizing the importance of rational expectations and market efficiency. It suggests that individuals make decisions based on all available information, leading to optimal outcomes in the economy. This approach often contrasts with Keynesian economics, which focuses on the role of government intervention in managing economic cycles. Key figures in New Classical Economics include Robert Lucas and Thomas Sargent, who argued that economic policies are often ineffective because people adjust their expectations based on anticipated government actions. This theory highlights the significance of supply-side factors and the belief that markets are generally self-correcting.