This school of thought originated in the early 1970s from the work of economists at the University of Chicago and Minnesota, most notably Robert Lucas. This school of thought emphasizes the importance of rigorous foundations based on microeconomics. New classical macroeconomics strives to provide the neoclassical microeconomic foundations for macroeconomic analysis. The new classical school of economics began with Lucas and Leonard Rapping's attempt to provide microfoundations for the Keynesian labor market. They applied the rule that equilibrium in a market occurs when the quantity supplied equals the quantity demanded. Keyne's view was that recessions occur when aggregate demand declines, forcing businesses to produce below their capacity. As businesses would start producing less, they would need fewer workers and employment would decline. The New Classical Economists reject this idea. They believe involuntary unemployment would provide businesses with the opportunity to increase profits. This would be possible by paying workers a lower wage. If companies decided not to seize this opportunity, they would not optimize. There are two fundamental principles of the new classical macroeconomics. The first, that individuals are seen as optimizers: they choose the best option available to them. The second, in first approximation, the adjustment of prices and incentives