Charles Goodhart

Charles Albert Eric Goodhart, (born 23 October 1936) is a British economist. He worked at the Bank of England on its public policy from 1968 to 1985, and worked at the London School of Economics from 1966 to 1968 and 1986 to 2002. His work focuses on central bank governance practices and monetary frameworks.

Early life and education Charles Goodhart was born on 23 October 1936 in Oxford, England, to Arthur Lehman Goodhart, an American residing in England, and his English wife, Cecily Carter. 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 and the Suez Crisis and earned the rank of second lieutenant in the King's Royal Rifle Corps. which was commissioned by the federal Reserve Bank of Boston. He stayed at the London School of Economics until 1968. During this time, Goodhart served as the first secretary of the Monetary Review Committee, who provided summarised views of monetary developments to the Chancellor of the Exchequer and HM Treasury. This quote became known as Goodhart's law; it is commonly expressed as: "When a measure becomes a target, it ceases to be a good measure". In the early 1980s, Goodhart joined the home finance division of the Bank of England, under John Fforde. which was reprinted later in Economica. During this period (1988–1995), his work focused on foreign exchange markets, specifically analysing the efficient-market hypothesis. To help with this research, Goodhart (with the help of Reuters) 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. Questions he asked Neil Shephard around 1991 encouraged the latter to work on problems in financial econometrics.

Goodhart helped advise and publicly supported the Reserve Bank of New Zealand Act (RBNZ) 1989, which permitted the Reserve Bank of New Zealand to vary interest rates to help meet agreed inflation targets. In 1997, he was appointed a CBE for services to monetary economics. Four years prior to the 2008 financial crisis, Goodhart identified how the global economy was financially unstable in his Per Jacobsson lecture "Some New Directions for Financial Stability?". In an article included as part of the South African Reserve Bank Conference, He advocates for policies that are supported by a strong theoretical base and backed up by empirical evidence and data.

Throughout his career, Goodhart played a role in improving the practice of financial regulation and central banking by making it easier for governments and central bankers to benefit public welfare by dampening economic cycles. Goodhart, C. 1989 Money, Information and Uncertainty The MIT Press This book covers most if not all aspects of monetary economics. It serves as a university textbook. It has eighteen chapters. The first nine focus on microeconomic issues and the following nine focus on macroeconomic issues. Goodhart, C. 1995 The Central Bank and The Financial System Palgrave Macmillan This book contains a collection of twenty-one published articles that address the shifting purpose of central banks over time, assess attempts to preserve price stability and critique debates about the United Kingdom's financial regulation proposals. Part I analyses the functions and purpose of central banking. Part II focuses on the existing objectives of central banks, particularly the maintenance of price stability. Part III takes a broad look at financial regulation and its issues. Ferrin, E & Goodhart, C 2001 Regulating Financial Services and Markets in the 21st Century Hart Publishing This article is a collection of essays that examine the effects of the Financial Services and Markets Act 2000. It specifically looks at the United Kingdom's financial sector and how it is evolving alongside the rapidly changing global economy. Goodhart, C. 2001 What Weight Should Be Given to Asset Prices in the Measurement of Inflation? The Economic Journal This article argues that using pure Alchian/Klein methodology lends excessive weight to unstable asset prices (e.g. housing) and that there are more suitable weighting schemes (e.g. those that derive either from final expenditures or econometrically measured relationships). Goodhart, C. 2008 The Regulatory Response to the Financial Crisis CESifo Working Paper Series No. 2257 This paper was Goodhart's response to the 2008 financial crisis. He examines six aspects of financial regulation within the United Kingdom's economy that the 2008 financial crisis highlighted. He then goes on to provide remedies for these regulatory failings. Brunnermeier, M., Crocket, A., Goodhart, C., Persaud, A. & Shin, H. 2009 The Fundamental Principles of Financial Regulation International Center for Monetary and Banking Studies Centre for Economic Policy Research Goodhart co-authored the 'Geneva Report on the World Economy 11'. This report examines and breaks down the regulatory failings that led to the 2008 financial crisis and provides conclusions and recommendations to avoid future economic crisis. Goodhart, C. 2010 Is a less pro-cyclical financial system an achievable goal? National Institute Economic Review In this article, Goodhart explains potential regulations that may lead to banking and finance becoming less cyclical. Goodhart, C. & Pradhan, M. 2020 The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival Palgrave Macmillan This book looks into what the future holds for the global economy as it is changed by the forces of globalisation and demography. It addresses matters such as dementia, ageing, inequality, retirement, populism and debt finance. Goodhart, C. & Vu, Ly Hoang 2024 Credibility, trust, and perception of authorities’ performance VoxEU When respondents feel most concerned with the need to prevent inflation, trust in all the various institutions of authority has become lower, while it is marginally higher when respondents cite economic growth as one of their most important concerns. Goodhart, C. & Vu, Ly Hoang 2025 When do People Trust their Government? DP20109, Discussion Paper Series, CEPR The study offers three main findings. The first is that economic growth plays a crucial role in determining trust in government, and its importance appears consistent across all regions. The second is the presence of a "Trust Paradox," whereby trust in government tends to be lower in fully democratic countries compared to single-party states, with the exception of Latin America. The third is that migration generally is positively related to trust in government. They explain this by noting that, historically, this has often been the case; however, when inward migration exceeds a certain threshold, the effect on trust often shifts. Charles Goodhart, Ly Hoang Vu 2025 Who adapts and who finances? Firm-level evidence on climate mitigation, gender, and access to credit CEPR Discussion Paper Series Charles Goodhart, Ly Hoang Vu 2026 The Personal Characteristics that Affect Trust in Government: A Global Analysis Across Regions CEPR Discussion Paper Series Charles Goodhart, Ly Hoang Vu 2026 Macroeconomic Performance and Corporate Climate Change Mitigation Actions: International Evidence and Implications for Vietnam Banking Review of State Bank of Vietnam Charles Goodhart, Ly Hoang Vu 2026 Climate change mitigation actions and the access to finance paradox for firms: International evidence and implications for Vietnam Banking Review of State Bank of Vietnam Charles Goodhart, Ly Hoang Vu 2026 Who Trusts National Institutions and The Role of Media Use: A Global Analysis Across Regions CEPR Discussion Paper Series