A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from December 14, 2009
Goldilocks Economy (Goldilocks Recovery; Goldilocks Scenario)

The children’s story of “Goldilocks and the Three Bears” had Goldilocks try to eat the three bowls of porridge. One porridge was too cold and one porridge was too hot, but one porridge was just right to eat.

A “Goldilocks economy” is one that is not too cold or overheated, but is just right. The term “Goldilocks economy” was cited in an April 1988 syndicated newspaper article by Dan Andriacco of the Scripps Howard News Service. The terms “Goldilocks economy” and “Goldilocks scenario” appeared in the November 12, 1988 New York (NY) Times. U.S. Secretary of Labor Robert Reich used the term “Goldilocks recovery” in 1995; ‘Goldilocks recovery” also become popular in 2009.

David Shulman of Salomon Brothers has claimed that he coined the term in a March 1992 paper titled “The Goldilocks Economy: Keeping the Bears at Bay,” but the term “Goldilocks economy” had been widely used for about four years before this date.


Wikipedia: Goldilocks economy
A Goldilocks economy is a not too hot or cold economy, sustaining moderate economic growth and a low inflation allowing for a market friendly monetary policy. The name comes from the children’s story The Three Bears. The first use of this phrase is credited to David Shulman of Salomon Brothers who wrote “The Goldilocks Economy: Keeping the Bears at Bay” in March 1992. The phrase is often mentioned by Larry Kudlow on his CNBC show.

It is the opposite of what Legal & General have dubbed sogflation.

Wikipedia: The Story of the Three Bears
“The Story of the Three Bears” (often known today as “Goldilocks and the Three Bears”) is a children’s story first recorded in narrative form by English author and poet Robert Southey and first published in a volume of his writings in 1837. The same year, writer George Nicol published a version in rhyme based upon Southey’s prose tale, with Southey approving the attempt to bring the story more exposure. Both versions tell of three bears and an old woman who trespasses upon their property.
(...)
Once the little girl entered the tale, she remained — suggesting children prefer an attractive child in the story rather than an ugly old woman. The juvenile antagonist saw a succession of names: Silver Hair in 1853 in the pantomime, Harlequin and The Three Bears; or, Little Silver Hair and the Fairies by J.B. Buckstone, Silver-Locks in Aunt Mavor’s Nursery Tales of 1858, Silverhair in George MacDonald’s “The Golden Key” (1867), Golden Hair in Aunt Friendly’s Nursery Book circa 1868, Silver-Hair and Goldenlocks at various times, Little Golden-Hair in 1889, and finally Goldilocks in Old Nursery Stories and Rhymes of 1904. Flora Annie Steel has also been credited with naming the child Goldilocks in her English Fairy Tales of 1918.

Finance Glossary
Goldilocks Economy
An economy whose growth is believed to be neither too ‘hot’ (i.e. too fast) or too ‘cold’ (too slow), but just right. The term was coined for the US economy in the mid- to late- 1990s. It is arguably an ideal state as it means the government does not have to use fiscal or monetary devices to artificially stimulate or restrain economic activity.

Word Spy
Goldilocks economy
(GOHL.dee.lawks i.KAWN.uh.mee) n. An economy that is not so overheated that it causes inflation, and not so cool that it causes a recession.
(...)
Earliest Citation:
The ‘’Goldilocks’’ scenario, as Mr. Berner of Salomon Brothers calls it, would have the G.N.P. slowing in 1989 to an annual growth rate of 2 to 2.5 percent, then maintaining this level into the 1990’s. This rate of expansion is considered by many to be the maximum that the nation can sustain without inflation.

But sustaining a steady growth rate of 2 to 2.5 percent requires just the right level of domestic consumption and overseas demand for American exports. Stephen S. Roach, senior economist at Morgan Stanley & Company, thinks they can be balanced for a while, giving the economy ‘’solid momentum continuing into next year.’’

But the consensus view of most economists is that a Goldilocks economy cannot survive beyond 1990.
—Louis Uchitelle, “Manaing risks,” The New York Times, November 13, 1988

24 April 1988, Salina (KS) Journal, pg. 43, col. 4:
“Goldilocks" economy
grips post-crash market

By DAN ANDRIACCO
By Scripps Howard News Service
Half a year after the great stock market crash of ‘87, the United States is in the throes of a Goldilocks economy:

Each new economic statistic sparks fear that business is running either too hot or too cold. It’s never “just right,” if you believe the professional prognosticators.

New York (NY) Times
MANAGING RISKS; AS THE ECONOMY SLOWS, THE UNCERTAINTIES INCREASE
By LOUIS UCHITELLE
Published: November 13, 1988
(...)
Goldilocks Economy
The ‘’Goldilocks’’ scenario, as Mr. Berner of Salomon Brothers calls it, would have the G.N.P. slowing in 1989 to an annual growth rate of 2 to 2.5 percent, then maintaining this level into the 1990’s. This rate of expansion is considered by many to be the maximum that the nation can sustain without inflation.

But sustaining a steady growth rate of 2 to 2.5 percent requires just the right level of domestic consumption and overseas demand for American exports. Stephen S. Roach, senior economist at Morgan Stanley & Company, thinks they can be balanced for a while, giving the economy ‘’solid momentum continuing into next year.’’

But the consensus view of most economists is that a Goldilocks economy cannot survive beyond 1990.

8 July 1989, Philadelphia (PA) Inquirer, pg. C8:
“It’s possible we have a ‘Goldilocks’ economy—not too hot and not too cold,” one trader said.

New York (NY) Times
ON LANGUAGE; The Goldilocks Recovery
By WILLIAM SAFIRE
Published: January 29, 1995
(...)
Standing next to Adviser Tyson, whose hair is auburn, Secretary Reich made his sunnily hirsute contribution to economic jargon, referring to “the Goldilocks recovery—not too hot, not too cold. . . .”

This catchy figure of speech is drawn, of course, from the story of “Goldilocks and the Three Bears,” in which a hungry young blond woman breaks into the home of an absent family of carnivorous furry mammals. She samples their porridge, their chairs (the furniture, not their discussion leaders) and their beds. The comparisons invariably lead her to the bowl, chair and bed of the smallest bear, which in the case of the cereal was neither too hot nor too cold, and in the cases of the furniture neither too hard nor too soft, but—just right.

The satisfaction of the bedtime story to the children of statisticians is in the discovery by Goldilocks of the perfect mean. (Others find in this story an example of the rip-off of third-world resources by the industrialized nations, but that could not be the Secretary’s intent.)

OCLC WorldCat record
How long for goldilocks economy?
Edition/Format: Article : English
Publication: BUSINESS REVIEW WEEKLY, 19, no. 11, (March 31, 1997): 106
Database: British Library Serials

OCLC WorldCat record
Reports - Foundations of the Goldilocks Economy: Supply Shocks and the Time-Varying NAIRU
Author: Robert J Gordon
Publisher: Washington, Brookings Institution.
Edition/Format: Article : English
Publication: Brookings papers on economic activity. no. 2, (1998): 297
Database: ArticleFirst

OCLC WorldCat record
THE CORPORATION - CORPORATE FINANCE - Fracturing fairy tales? - The Goldilocks economy is humming, but the bears are getting hungry
Author: Justin Schack
Publisher: [New York, Institutional Investor, inc., etc.]
Edition/Format: Article : English
Publication: The Institutional investor. 33, no. 11, (1999): 32
Database: ArticleFirst

OCLC WorldCat record
BUSINESS - America’s Goldilocks economy
Author: Allister Heath
Publisher: London : F.C. Westley, 1828-
Edition/Format: Article : English
Publication: The spectator. (March 03, 2007): 31
Database: ArticleFirst

Herb Greenberg - MarketWatch
January 11, 2008, 12:30 PM EST
Herb Greenberg home page
The Truth about ‘Goldilocks’
In a post here yesterday, “Bears to Goldilocks: ‘It’s Our House,” I wrote that Goldilocks never had a chance.

That prompted this David Shulman, senior economist of the UCLA Anderson Forecast, to chime in:

It’s bad enough Kudlow misuses the meaning of the “Goldilocks Economy”, but you too. I coined the term in March 1992 with a strategy piece for Salomon Brothers entitled, “The Goldilocks Economy: Keeping the Bears at Bay” where I referred to an economy that was hot enough for profit growth, but cool enough to keep the Fed from hiking interest rates. We haven’t been in that situation for awhile.

Daily Finance
Investors would be wise to ignore the “Goldilocks” recovery scenario
Vishesh Kumar
Dec 13th 2009 at 8:30PM
Despite last year’s mauling, some high-profile Wall Street analysts see a “Goldilocks” scenario for the economy. That would be one where inflation remains subdued and growth picks up briskly. But investors should think twice before betting on such a fairy tale.

Posted by Barry Popik
New York CityBanking/Finance/Insurance • (0) Comments • Monday, December 14, 2009 • Permalink