Menu
Home
People
Places
Arts
History
Plants & Animals
Science
Life & Culture
Technology
Reference.org
Policy-ineffectiveness proposition
open-in-new
<p>The policy-ineffectiveness proposition (PIP) is a <a href="/facts/New_classical/puHe0YKr">new classical</a> theory proposed in 1975 by <a href="/facts/Thomas_J._Sargent/ILqddydh">Thomas J. Sargent</a> and <a href="/facts/Neil_Wallace/BlhMKjgs">Neil Wallace</a> based upon the theory of <a href="/facts/Rational_expectations/SSMQLugI">rational expectations</a>, which posits that monetary policy cannot systematically manage the levels of output and employment in the economy. </p>