The Goodhart Rule (From The International Economy)

In March 2021, Bloomberg BusinessWeek published an essay on economist Charles Goodhart’s 1975 law that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” The examples cited in the Bloomberg article are interesting, but they are mostly through a regulatory and microeconomic prism. The most important use of Goodhart’s law might be in targeting public policy goals, according to Lexington CEO Merrick “Mac” Carey. A PDF of Mr. Carey’s article from The International Economy magazine on the Goodhart Rule can be found here.