Shmoop Finance

Goldilocks tried an economy with lots of money, which led to too much inflation. So then Goldilocks tried an economy with less money, but that led to a recession. Finally, Goldilocks found the economy that functions juuusssst right.

A Goldilocks economy is an economy that’s “just right”: there’s not too much inflation, but no recession in sight either. A Goldilocks economy implies unemployment is low and that the economy is humming along smoothly with growing GDP.

There’s no “official” measures for a Goldilocks economy…it’s more of a colloquial term. But, in general, it means smooth sailing for the economy.