# Goodhart’s Law

- Canonical URL: https://www.gerhardmerk.de/goodharts-law
- Post ID: 593267
- Modified: 2023-07-25T21:00:37+00:00
- Language: en

## Definition

Any demonstrably established relationship between macroeconomic variables changes when it is made useful for the purpose of monetary policy (as soon as an economic indicator is made a target for the purpose of monetary policy then it will lose the information content that would qualify it to play that role). - In other words, an indicator becomes ineffective the moment it is used for monetary policy. Empirically calculated regularities - e.g. between interest rates, money supply and inflation - become ineffective as soon as the system is intervened in from the outside with the aim of controlling it. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1