Rational expectations

The idea that people base their decisions on the best information available to them and learn from their mistakes. In particular, this led free-market and monetarist economists to argue that consumers would anticipate government policy changes and adjust their behaviour accordingly. So if the government runs a big budget deficit to stimulate demand, consumers will anticipate that taxes will rise in the long run, and save some of the windfall to meet their future tax bills (an idea known as Ricardian equivalence). Thus Keynesian fiscal policy will be self-defeating in the long run.