What is Goodhart's Law?
A) If you control the indicator of a problem, rather than the problem itself, the indicator will lose its indicative value.
B) Interest rates should be kept as low as possible.
C) There is no point in trying to use indicators for the formulation of monetary policy.
D) The money supply cannot be controlled.

Question

Quizplus · Accepted Answer

Goodhart's Law states that when a measure becomes a target, it ceases to be a good measure. This means that if you control the indicator of a problem, rather than the problem itself, the indicator will lose its indicative value.

What Is Goodhart's Law