The State of the Global Economy - A Central Banker's Perspective

Why didn’t central banks see the financial crisis coming?

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Charles Goodhart, former member of the Bank of England’s Monetary Policy Committee, offers a central banker’s view on the global economy. Why didn’t central banks see the financial crisis coming? Charles Goodhart offers a simple answer: “Everything that a central bank ought to be interested in was excluded from the model.” And what is his advice for today’s policy makers and regulators? He points to the lessons from his famous “Goodhart’s Law,” which he coined back in 1975

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