Goodhart’s law

Physicists have long noted that observing some phenomena actually changes their nature. In finance, the equivalent is known as Goodhart’s law, after the British economist Charles Goodhart, who in 1975 argued that once a measure becomes a target, it loses the very properties that made it a good gauge to begin with.

—Robin Wigglesworth in the FT: ‘How a volatility virus infected Wall Street


“When a measure becomes a target, it ceases to be a good measure.”

Goodhart’s law – Wikipedia

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