Goldilocks economy

A Goldilocks economy is an economy that is not too hot or cold, in other words sustains moderate economic growth, and that has low inflation, which allows a market-friendly monetary policy. The name comes from the children's story The Three Bears. The first use of this phrase was by an unnamed government official in a December 20, 1996 Wall Street Journal article. It appeared in print again, in the Washington Post, on January 8, 1967, attributed to James S. Duesenberry of the Council of Economic Advisers.[1] The phrase was picked up in a few other publications, shortly thereafter. It gained wider use after 1988 following an April column by Scripps-Howard columnist Dan Andriacco[2] and a November New York Times article quoting Richard B. Berner of Salomon Brothers.[3]

Goldilocks economy is primarily used to describe the economic indicators of the Great moderation: stable GDP growth, industrial production, monthly payroll employment, unemployment rate, real wages and consumer prices.[4]

Micheal Hudson argues that the positive connotations associated with the "Goldilocks economy" and the "Great moderation" are because these terms were coined by bankers, who saw their loans soar along with their bonuses during this period. However, this economy was not "Goldilocks" for everyone. Indeed, during this period, the rich accumulated more wealth while the poor and middle class accumulated a tremendous amount of household debt.[5]

Around the year 2017 is seen by some as being the new peak of a goldilocks economy.[6]