A Goldilocks economy is an economy that is not too hot or cold, in other words sustains moderate economic growth, and that has low inflation, which allows a market-friendly

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...

. The name comes from the

children's story "Children's Story" is a song recorded by British-American hip hop artist Slick Rick. Taken as the second single from his album ''The Great Adventures of Slick Rick'', the song was a Top 5 hit on both the Hot R&B Singles and the Hot Rap Tracks ...

Goldilocks and the Three Bears "Goldilocks and the Three Bears" (originally titled "The Story of the Three Bears") is a 19th-century English fairy tale of which three versions exist. The original version of the tale tells of an obscene old woman who enters the forest home ...

''.

History

The first use of this phrase was by an unnamed U.S. government official in a 20 December 1966 article in ''

The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...

''. It appeared in print again, in ''

The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...

'', on 8 January 1967, attributed to James S. Duesenberry of the Council of Economic Advisers. The phrase was picked up in a few other publications shortly thereafter. It gained wider use after 1988 following an April column by Dan Andriacco of

Scripps-Howard The E. W. Scripps Company is an American broadcasting company founded in 1878 as a chain of daily newspapers by Edward Willis "E. W." Scripps and his sister, Ellen Browning Scripps. It was also formerly a media conglomerate. The company is he ...

, and a November ''

The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...

'' article quoting Richard B. Berner of

Salomon Brothers Salomon Brothers, Inc., was an American multinational bulge bracket investment bank headquartered in New York. It was one of the five largest investment banking enterprises in the United States and the most profitable firm on Wall Street durin ...

. The phrase was popularized and reformulated by Salomon Brothers' chief equity strategist David Shulman by his March 1992 report "The Goldilocks Economy: Keeping the Bears at Bay." Goldilocks economy is primarily used to describe the economic indicators of the

Great Moderation The Great Moderation is a period in the United States of America starting from the mid-1980s until at least 2007 characterized by the reduction in the volatility of business cycle fluctuations in developed nations compared with the decades befor ...

: stable

GDP growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...

, industrial production, monthly

payroll A payroll is the list of employees of some company that is entitled to receive payments as well as other work benefits and the amounts that each should receive. Along with the amounts that each employee should receive for time worked or tasks pe ...

employment,

unemployment rate Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refere ...

, real wages and consumer prices. Michael Hudson argues that the positive connotations associated with the "Goldilocks economy" and the "Great Moderation" are because these terms were coined by bankers, who saw their loans soar along with their bonuses during this period. However, this economy was not "Goldilocks" for everyone. Indeed, during this period, the rich accumulated more wealth while the poor and middle class accumulated a tremendous amount of

household debt Household debt is the combined debt of all people in a household, including consumer debt and mortgage loans. A significant rise in the level of this debt coincides historically with many severe economic crises and was a cause of the U.S. and su ...

. In 2017, ''

The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Eco ...

'', citing a poll of global fund managers, suggested that the Goldilocks economy was returning; the post-

Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...

economic expansion starting in 2009 and ending when the economy crashed in 2020, (sometimes referred to as the "Great Austerity"), was posited by MarketWatch to be a return of the Goldilocks economy.

References

External links

Example usage
Economic geography Economics catchphrases {{economy-stub