The idea that policy actions have no real effects in the short run if they are anticipated and no real effects in the long run is called the

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The policy irrelevance proposition states that policy actions have no real effects in the short run if they are anticipated and no real effects in the long run. This proposition is often associated with the rational expectations hypothesis, which suggests that economic agents will form expectations about future policy actions and adjust their behavior accordingly. Therefore, policymakers cannot achieve their desired outcomes by simply changing policy, as their actions will be offset by the adaptive behavior of economic agents.

The Idea That Policy Actions Have No Real Effects in the Short