Chicago school of economics
In 1976, Robert Lucas of the Chicago school of economics introduced the Lucas critique, which called into question the logic behind Keynesian macroeconomic policy making. The new classical economics became the dominant school in macroeconomics. By the mid-1970s, policy makers were beginning to lose their confidence in the effectiveness of government intervention in the economy. In 1976 British Prime Minister James Callaghan said that the option of “spending our way out of recession” no longer exists.