Charles Albert Eric Goodhart, (born 23 October 1936) is a British
economist
An economist is a professional and practitioner in the social sciences, social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
. His career can be divided into two sections: his term with the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
and its associated public policy; and his academic work with the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 milli ...
. Charles Goodhart's work focuses on central bank governance practices and monetary frameworks.
He also conducted academic research into
foreign exchange markets.
He is best known as the founder of
Goodhart's Law
Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on m ...
, which states: "When a measure becomes a target, it ceases to be a good measure."
Early life and education
Charles Goodhart was born on 23 October 1936 to an American Jew,
Arthur Lehman Goodhart
Arthur Lehman Goodhart (1 March 1891 in New York City – 10 November 1978 in Oxford) was an American-born academic jurist and lawyer; he was Professor of Jurisprudence at the University of Oxford, 1931–51, when he was also a Fellow of Uni ...
, and his English wife, Cecily Carter, in Oxford, England.
Arthur Lehman Goodhart
Arthur Lehman Goodhart (1 March 1891 in New York City – 10 November 1978 in Oxford) was an American-born academic jurist and lawyer; he was Professor of Jurisprudence at the University of Oxford, 1931–51, when he was also a Fellow of Uni ...
studied law at
Trinity College Trinity College may refer to:
Australia
* Trinity Anglican College, an Anglican coeducational primary and secondary school in , New South Wales
* Trinity Catholic College, Auburn, a coeducational school in the inner-western suburbs of Sydney, New ...
, Cambridge, eventually becoming a law don at
Corpus Christi College.
Following the family's move to
Oxford
Oxford () is a city in England. It is the county town and only city of Oxfordshire. In 2020, its population was estimated at 151,584. It is north-west of London, south-east of Birmingham and north-east of Bristol. The city is home to the ...
, Charles' father became the Professor of
Jurisprudence
Jurisprudence, or legal theory, is the theoretical study of the propriety of law. Scholars of jurisprudence seek to explain the nature of law in its most general form and they also seek to achieve a deeper understanding of legal reasoning ...
in 1936 and the Master of University College (1951–1963).
Cecily Carter brought her three sons (
Phillip Goodhart,
William Goodhart
William Howard Goodhart, Baron Goodhart, (18 January 1933 – 10 January 2017) was a British Liberal Democrat politician, a leading property and human rights lawyer, and a member of the House of Lords.
Background and early life and career
...
and Charles Goodhart) up as members of the
Church of England
The Church of England (C of E) is the established Christian church in England and the mother church of the international Anglican Communion. It traces its history to the Christian church recorded as existing in the Roman province of Brit ...
.
During
WWII
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, Arthur Goodhart's outspoken opposition to
Nazism
Nazism ( ; german: Nazismus), the common name in English for National Socialism (german: Nationalsozialismus, ), is the far-right totalitarian political ideology and practices associated with Adolf Hitler and the Nazi Party (NSDAP) i ...
led to Charles (aged 2) being evacuated alongside his two elder brothers to the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
.
Upon their return, Charles joined his brother
William Goodhart
William Howard Goodhart, Baron Goodhart, (18 January 1933 – 10 January 2017) was a British Liberal Democrat politician, a leading property and human rights lawyer, and a member of the House of Lords.
Background and early life and career
...
at the St Leonards branch of the (Oxford)
Summerfields School.
Charles was then accepted to
Eton College
Eton College () is a Public school (United Kingdom), public school in Eton, Berkshire, England. It was founded in 1440 by Henry VI of England, Henry VI under the name ''Kynge's College of Our Ladye of Eton besyde Windesore'',Nevill, p. 3 ff. i ...
where he focused on the study of history and languages.
After he finished school, he completed two years of compulsory national military service (1955–1956) in which he was involved with the
Hungarian Revolution of 1956
The Hungarian Revolution of 1956 (23 October – 10 November 1956; hu, 1956-os forradalom), also known as the Hungarian Uprising, was a countrywide revolution against the government of the Hungarian People's Republic (1949–1989) and the Hunga ...
and the
Suez Crisis
The Suez Crisis, or the Second Arab–Israeli war, also called the Tripartite Aggression ( ar, العدوان الثلاثي, Al-ʿUdwān aṯ-Ṯulāṯiyy) in the Arab world and the Sinai War in Israel,Also known as the Suez War or 1956 Wa ...
and earned the title of
Second lieutenant
Second lieutenant is a junior commissioned officer military rank in many armed forces, comparable to NATO OF-1 rank.
Australia
The rank of second lieutenant existed in the military forces of the Australian colonies and Australian Army unt ...
in the
King's Royal Rifle Corps
The King's Royal Rifle Corps was an infantry rifle regiment of the British Army that was originally raised in British North America as the Royal American Regiment during the phase of the Seven Years' War in North America known in the United ...
.
Cambridge (1957–1965)
In October of 1957, Goodhart started studying
economics
Economics () is the social science that studies the production, distribution, and consumption of goods and services.
Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics anal ...
at
Cambridge University
, mottoeng = Literal: From here, light and sacred draughts.
Non literal: From this place, we gain enlightenment and precious knowledge.
, established =
, other_name = The Chancellor, Masters and Schola ...
.
In his first year, he came in first in his course.
He learnt under economists such as Nicky Kaldor,
Richard Kahn,
Joan Robinson
Joan Violet Robinson (''née'' Maurice; 31 October 1903 – 5 August 1983) was a British economist well known for her wide-ranging contributions to economic theory. She was a central figure in what became known as post-Keynesian economics.
...
, Michael Farrell,
Frank Hahn
Frank Horace Hahn FBA (26 April 1925 – 29 January 2013) was a British economist whose work focused on general equilibrium theory, monetary theory, Keynesian economics and critique of monetarism. A famous problem of economic theory, the condi ...
and
Robin Matthews.
In his final year of study, he was paired in tutorials with
Sir James Mirrless.
He completed his
undergraduate
Undergraduate education is education conducted after secondary education and before postgraduate education. It typically includes all postsecondary programs up to the level of a bachelor's degree. For example, in the United States, an entry-le ...
course with
First Class Honours
The British undergraduate degree classification system is a grading structure for undergraduate degrees or bachelor's degrees and integrated master's degrees in the United Kingdom. The system has been applied (sometimes with significant variati ...
.
After completing his
undergraduate
Undergraduate education is education conducted after secondary education and before postgraduate education. It typically includes all postsecondary programs up to the level of a bachelor's degree. For example, in the United States, an entry-le ...
degree at
Cambridge
Cambridge ( ) is a university city and the county town in Cambridgeshire, England. It is located on the River Cam approximately north of London. As of the 2021 United Kingdom census, the population of Cambridge was 145,700. Cambridge bec ...
, Charles moved to the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
in 1960 to begin research at
Harvard University
Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of highe ...
studying
trade cycles.
In June 1962, following the completion of his PhD thesis, which analysed
United States monetary history (specifically why the economy rebounded in 1907 but not in 1929), Charles and his new wife travelled back to
Cambridge
Cambridge ( ) is a university city and the county town in Cambridgeshire, England. It is located on the River Cam approximately north of London. As of the 2021 United Kingdom census, the population of Cambridge was 145,700. Cambridge bec ...
.
Charles took up a Prize Fellowship at
Trinity College Trinity College may refer to:
Australia
* Trinity Anglican College, an Anglican coeducational primary and secondary school in , New South Wales
* Trinity Catholic College, Auburn, a coeducational school in the inner-western suburbs of Sydney, New ...
and became an
assistant lecturer
Lecturer is an academic rank within many universities, though the meaning of the term varies somewhat from country to country. It generally denotes an academic expert who is hired to teach on a full- or part-time basis. They may also conduct re ...
in economics (1963–1964).
He spent the next two years interpreting English monetary history by cumulating and analysing the monthly reports of the
London Joint Stock Banks, which were published after the
Barings crisis of 1890.
London School of Economics (1966–1968)
In 1964, Goodhart briefly joined the
Department of Economic Affairs.
During this time, he worked on
White Papers
A white paper is a report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision. A white paper ...
, planning the growth of the energy, construction and housing sectors in England.
Goodhart left the
Department of Economic Affairs in 1966 when he joined the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 milli ...
as a lecturer on
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for federal funds, very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money s ...
.
During this time, he contributed to a study on English monetary policy Monetary Policy in Twelve Industrial Countries which was commissioned by the federal
Reserve Bank of Boston.
He also co-authored an article in the field of
political economy
Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour ...
alongside R.J. Bhansali, which featured in the journal '
Political Studies'. He stayed at the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 milli ...
until 1968.
Career
Bank of England (1968–1985)
Charles left the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 milli ...
to work a temporary two-year assignment at the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
.
He found his expertise in
monetary economics
Monetary economics is the branch of economics that studies the different competing theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value and unit of account), and ...
and his knowledge of
Milton Friedman's ideas to be of high value.
He was allocated to the Economic Intelligence Department which was responsible for calculating and simulating
economic statistics as well as writing th
Bank of England's Quarterly Bulletin His first job at the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
was to explain the concept of domestic
credit expansion to individuals within the Bank, whilst conveying the Bank's viewpoints on such issues to outside economists.
In 1970, he was tasked with empirically assessing the predictability of the demand for money, and had the results published in th
Bank of England's Quarterly Bulletinin a paper called 'The Importance of Money'. During this time Goodhart served as the first secretary of the
Monetary Review Committee, who provided summarised views of monetary developments to the
Chancellor
Chancellor ( la, cancellarius) is a title of various official positions in the governments of many nations. The original chancellors were the of Roman courts of justice—ushers, who sat at the or lattice work screens of a basilica or law cou ...
and
Treasury of England.
Whilst attending a conference held by the
Reserve Bank of Australia
The Reserve Bank of Australia (RBA) is Australia's central bank and banknote issuing authority. It has had this role since 14 January 1960, when the ''Reserve Bank Act 1959'' removed the central banking functions from the Commonwealth Bank.
Th ...
in 1975, Goodhart wrote in his footnotes "whenever a government seeks to rely on a previously observed statistical regularity for control purposes, that regularity will collapse".
This quote became known as
Goodhart's Law
Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on m ...
.
Goodhart's Law
Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on m ...
is commonly expressed as: "When a measure becomes a target, it ceases to be a good measure".
In 1979, Goodhart jointly wrote a paper which was published in th
Bank of England's Quarterly Bulletin This paper advised the new
Thatcher government against implementing
monetary base control. In the early 1980's, Goodhart joined the home finance division of the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
, under
John Fford.
In 1980 he was promoted to Senior Adviser at the Bank of England and stayed at this role until 1985.
Following the events of
Black Saturday (1983) Black Saturday, 24 September 1983, is the name given to the crisis when the Hong Kong dollar exchange rate versus the United States dollar was at an all-time low. On that day, US$1 exchanged for HK$9.6. For a period, Hong Kong stores began quoting p ...
, Goodhart travelled to
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a List of cities in China, city and Special administrative regions of China, special ...
to assist in implementing a currency board system that was linked to the
United States dollar
The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
.
This system helped solve the
Hong Kong monetary crisis.
Goodhart served on the Hong Kong Exchange Fund Advisory Council (an advisory board for the
Hong Kong Monetary Authority
The Hong Kong Monetary Authority (HKMA) is Hong Kong's central banking institution. It is a government authority founded on 1 April 1993 when the Office of the Exchange Fund and the Office of the Commissioner of Banking merged. The organisati ...
) for more than a decade (1983–1997).
London School of Economics (1986–2002)
Following Goodhart's departure from the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
, he re-joined the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 milli ...
as the Norman Sosnow Professor of Banking and Finance.
He co-founded the Financial Markets Group alongside
Prof. Mervyn King, in 1986.
In late 1987, he gave his first lecture; 'The foreign exchange market: a random walk with a dragging anchor', which was reprinted later in
Economica
''Economica'' is a peer-reviewed academic journal of generalist economics published on behalf of the London School of Economics by Wiley-Blackwell. Established in 1921, it is currently edited by Nava Ashraf, Oriana Bandiera, Tim Besley, France ...
. During this period (1988 – 1995) his work focused on
foreign exchange markets, specifically analysing the
efficient-market hypothesis
The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted bas ...
. To help with this research, Goodhart (with the help of
Reuters
Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world.
The agency was est ...
) built his own data series.
He then collaborated with Swiss firm Olsen and Associates to lead conferences about the importance of high speed data analysis and collection.
His results from his work were published in his book: 'The Foreign Exchange Market: Empirical Studies With High-Frequency Data'.
Goodhart helped advise and publicly supported the ''Reserve Bank of New Zealand Act (RBNZ) 1989'', which permitted the
Reserve Bank of New Zealand
The Reserve Bank of New Zealand (RBNZ, mi, Te Pūtea Matua) is the central bank of New Zealand. It was established in 1934 and is constituted under the Reserve Bank of New Zealand Act 1989. The governor of the Reserve Bank is responsible for ...
to vary interest rates to help meet agreed
inflation targets.
In 1990, Goodhart was elected as a
Fellow of the British Academy
Fellowship of the British Academy (FBA) is an award granted by the British Academy to leading academics for their distinction in the humanities and social sciences. The categories are:
# Fellows – scholars resident in the United Kingdom
# ...
.
In 1997 he was awarded the
CBE for services to
monetary economics
Monetary economics is the branch of economics that studies the different competing theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value and unit of account), and ...
.
From late 1997 until May 2000, he was a member of the
Bank of England Monetary Policy Committee.
He retired from the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 milli ...
in 2002 at which point he was appointed the Emeritus Professor of Banking and Finance.
Following his retirement, Goodhart continued to write academic articles and books.
He assisted in the
English Parliament's review of approaches to
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for federal funds, very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money s ...
in 2007. Four years prior to the
Global Financial Crisis
Global means of or referring to a globe and may also refer to:
Entertainment
* ''Global'' (Paul van Dyk album), 2003
* ''Global'' (Bunji Garlin album), 2007
* ''Global'' (Humanoid album), 1989
* ''Global'' (Todd Rundgren album), 2015
* Bruno ...
, Goodhart identified how the global economy was financially unstable in his
Per Jacobsson lecture 'Some New Directions for Financial Stability?'.
In the years following the
Global Financial Crisis
Global means of or referring to a globe and may also refer to:
Entertainment
* ''Global'' (Paul van Dyk album), 2003
* ''Global'' (Bunji Garlin album), 2007
* ''Global'' (Humanoid album), 1989
* ''Global'' (Todd Rundgren album), 2015
* Bruno ...
, much of his work has focused on fixing regulation to provide
financial stability
Financial stability is a property of a financial system that dissipates financial imbalances that arise endogenously in the financial markets or as a result of significant adverse and unforeseeable circumstances. When stable, the system absorbs ...
for the economy, specifically providing reforms that "diminish the extent and volatility of the
credit
Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...
and
leverage cycles".
[Goodhart, C.A.E. (2011b)]
'The Emerging New Architecture of Financial Regulation'.
Chapter 1 in ''Monetary Policy and Financial Stability in the Post-crisis Era''. South African Reserve Bank Conference Series 2010, South African Reserve Bank 90th Anniversary. Pretoria: South African Reserve Bank: 1–5 In an article included as part of the
South African Reserve Bank
The South African Reserve Bank (SARB) is the central bank of South Africa. It was established in 1921 after Parliament passed an act, the "Currency and Bank Act of 10 August 1920", as a direct result of the abnormal monetary and financial condi ...
Conference,
Goodhart assessed the actions taken to provide global financial stability and concluded: "proposed reforms are incomplete and/or partially misdirected".
In 2015, Goodhart critiqued the Warsh Review of the
Bank of England's policy on
monetary process.
He was also an economic consultant at
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
from 2009 until 2016, when he retired at the age of 80.
At the 2021
Central Banking
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
Awards, Goodhart was awarded the Central Banking Lifetime Achievement Award for his work on
monetary frameworks,
risk management and
foreign exchange markets as well as his involvement in the Hong Kong peg, the independence of the
Royal Bank of New Zealand and the creation of
Goodhart's Law
Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on m ...
.
Influence
Goodhart's Law
One of Charles Goodhart's most prominent contributions to
monetary economics
Monetary economics is the branch of economics that studies the different competing theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value and unit of account), and ...
is known as
Goodhart's Law
Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on m ...
. Charles wrote this law in the
footnotes
A note is a string of text placed at the bottom of a page in a book or document or at the end of a chapter, volume, or the whole text. The note can provide an author's comments on the main text or citations of a reference work in support of t ...
of his paper Problems of monetary management: the UK experience
for the
Reserve Bank of Australia
The Reserve Bank of Australia (RBA) is Australia's central bank and banknote issuing authority. It has had this role since 14 January 1960, when the ''Reserve Bank Act 1959'' removed the central banking functions from the Commonwealth Bank.
Th ...
during his time at the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
(1975). The law states that: "whenever a government seeks to rely on a previously observed statistical regularity for control purposes, that regularity will collapse".
Although written initially as a witty comment about monetary targeting,
the underlying thought behind this notion was taken very seriously and was linked to the
Lucas Critique
The Lucas critique, named for American economist Robert Lucas's work on macroeconomic policymaking, argues that it is naive to try to predict the effects of a change in economic policy entirely on the basis of relationships observed in historica ...
of evaluation and policy modelling.
This law was generalised by
anthropologist
An anthropologist is a person engaged in the practice of anthropology. Anthropology is the study of aspects of humans within past and present societies. Social anthropology, cultural anthropology and philosophical anthropology study the norms an ...
Marilyn Strathern
Dame Ann Marilyn Strathern, DBE, FBA (née Evans; born 6 March 1941) is a British anthropologist, who has worked largely with the Mount Hagen people of Papua New Guinea and dealt with issues in the UK of reproductive technologies. beyond the world of statistics. The most commonly used version of
Goodhart's Law
Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on m ...
comes from
Strathern's paper: "When a measure becomes a target, it ceases to be a good measure".
In reflection to the creation of
Goodhart's Law
Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure". It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on m ...
, Charles wrote: "it does feel slightly odd to have one's public reputation largely based on a minor footnote".
Research
Goodhart pioneered the integration of
macroeconomics
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
and
finance
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of f ...
, bringing them together in the
monetary
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are ...
and
regulatory policies of
central banks
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
.
He advocates for policies that are supported by a strong
theoretical
A theory is a rational type of abstract thinking about a phenomenon, or the results of such thinking. The process of contemplative and rational thinking is often associated with such processes as observational study or research. Theories may be ...
base and backed up by
empirical evidence
Empirical evidence for a proposition is evidence, i.e. what supports or counters this proposition, that is constituted by or accessible to sense experience or experimental procedure. Empirical evidence is of central importance to the sciences ...
and data.
To provide this
empirical evidence
Empirical evidence for a proposition is evidence, i.e. what supports or counters this proposition, that is constituted by or accessible to sense experience or experimental procedure. Empirical evidence is of central importance to the sciences ...
, Goodhart used economic models that can be expressed in the
mathematic form.
He found value in
mathematical models
A mathematical model is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling. Mathematical models are used in the natural sciences (such as physi ...
as they can be integrated with real world data – exposing their usefulness and any underlying interactions.
He is quoted saying: "It is only by constructing a mathematical
institutional economics
Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behavior. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the ...
that one can study the economic system in a rigorous and analytical manner".
[Goodhart, C.A.E. (2013).]
Narratives of the Great Financial Crisis (GFC): Why I Am Out of Step'
''Journal of Financial Perspectives'', 1(3): 13–19.
Throughout his career, Goodhart played a role in improving the practice of
financial regulation
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handle ...
and
central banking
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
by making it easier for governments and central bankers to benefit
public welfare by dampening
economic cycles.
Selected works
Google Scholar
Google Scholar is a freely accessible web search engine that indexes the full text or metadata of scholarly literature across an array of publishing formats and disciplines. Released in beta in November 2004, the Google Scholar index includes ...
listed Charles Goodhart being the author or co-author of 539 articles and books by the end of 2017.
His most cited works include ''Money, Information and Uncertainty'' and ''The Evolution of Central Banks.''
References
External links
*
*
{{DEFAULTSORT:Goodhart, Charles
1936 births
Living people
Academics of the London School of Economics
Alumni of Trinity College, Cambridge
Harvard Graduate School of Arts and Sciences alumni
British economists
British Jews
Commanders of the Order of the British Empire
Jewish scientists
Fellows of the British Academy
Lehman family
Honorary Fellows of the London School of Economics
Institute for New Economic Thinking