New Paper Advances Thinking on Living Standards

Treasury Secretary Gabriel Makhlouf has welcomed the publication of The New Zealand Treasury’s Living Standards Framework – Exploring a Stylised Model, a new Working Paper by the Treasury’s Chief Economist Dr Girol Karacaoglu.

The Living Standards Framework is a guide for thinking about good economic, environmental and social policy in an integrated way – policy that aims to enhance individual and communal wellbeing on a sustained basis. This Working Paper presents an evolving stylised and unified model for the Living Standards Framework, weaving together threads from the wellbeing, sustainable development and endogenous economic growth literatures.

While Working Papers represent the views of their authors rather than the Treasury, Mr Makhlouf acknowledged the paper and the model development effort as significant next steps in better understanding the interconnectedness of public policy and living standards.

“Higher living standards are very important to the Treasury and sit at the heart of our vision as an organisation. We take a broad view of wellbeing, and the model outlined in Dr Karacaoglu’s paper demonstrates the developing rigorous analytical thinking that underpins that view. It also issues an open invitation to academics and other researchers to be engaged with this process,” says Mr Makhlouf.

“Where appropriate, the Living Standards Framework is intended to enrich and enhance, rather than replace, standard cost-benefit analysis, as recognised in the Treasury’s recently updated Guide to Social Cost Benefit Analysis (http://www.treasury.govt.nz/publications/guidance/planning/costbenefitanalysis/guide).

“This Working Paper has been peer reviewed by academics, and has benefited from feedback provided by domestic and international academics and policy advisers. It is not just a step forward in thinking on living standards in New Zealand; it is also a valuable addition to the international policy-focused literature on this area.”

The New Zealand Treasury’s Living Standards Framework – Exploring a Stylised Modelcan be viewed on the Treasury website at http://www.treasury.govt.nz/publications/research-policy/wp/2015/15-12.

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