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The New Zealand Treasury’s Living Standards Framework - Exploring a Stylised Model

Girol Karacaoglu, September 2015

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Summary :

The New Zealand Treasury’s Living Standards Framework (LSF) 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 paper presents an evolving stylised model (one possible model) for the LSF; it is work in progress. The model is constructed by weaving together threads from the wellbeing, sustainable development and endogenous economic growth literatures. Its primary aim is to capture all key attributes of the LSF in a unified model. In doing so, I wish to identify the domain of a public policy that aims to enhance collective intergenerational wellbeing, highlight the key complementarities and tradeoffs that we face as a society in this pursuit, and explore the policy options and levers available to the policy makers to relax these tradeoffs and exploit the complementarities to the same end.