Problems of Monetary Management: The UK Experience
Goodhart — original statement of Goodhart's Law (monetary targets)
1975 RBA conference paper: stable monetary relationships break down when used as control targets.
Goodhart, C. A. E. (1975). Problems of Monetary Management: The UK Experience. In Papers in Monetary Economics (Vol. 1). Reserve Bank of Australia. (Conference, Sydney, July 1975.)
A companion paper in the same volume: Monetary Relationships: A View from Threadneedle Street.
Original claim (monetary policy)
Goodhart observed that econometric regularities supporting UK monetary management — relationships that looked stable in research — failed under targeting pressure when central banks used them as intermediate control variables. His named formulation:
Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.
This is Goodhart’s Law in the author’s sense: a warning about control use destroying the measurement relationship, first articulated in central banking, not in software metrics or citation counts.
Goodhart (2013) and Chrystal & Mizen (2003) discuss origins and later readings; Goodhart notes the label was applied by others when the idea spread beyond monetary economics.
What we cite
- Original wording and domain — monetary management, statistical regularities, control pressure.
- Distinction from the popular aphorism — when a measure becomes a target… is Strathern (1997), not this paper.