Gabriel Makhlouf: Remarks on the occasion of the publication of
"Love you"
Remarks by Mr Gabriel Makhlouf, Governor of the Central Bank of Ireland, on the occasion of the
publication "Love you: public policy for intergenerational wellbeing" by Girol Karacaoglu, 17
February 2021.
* * *
Good morning and good evening. It's a pleasure to join you at this book launch, and to
congratulate the publishers and of course the author, my good friend Girol Karacaoglu. I'm
particularly pleased to have been asked to say a few words on the background and context for
the wellbeing work programme; it's been a good opportunity to reflect on that part of the journey
that's now about a decade old, although much older overall and in many ways still young.
Wellbeing has been a focus of economic policy for a very long time but I'll take 2011, the year
Girol joined the Treasury, as my starting point for today. I became Treasury Secretary earlier that
year, a week after my predecessor - John Whitehead - spoke at the publication of a Treasury
Paper on the Living Standards Framework saying, quite rightly, that work on wellbeing was not
new but one of the aims of the paper was "to provide some clarity around the ultimate aims of
[the Treasury's] work".
The Framework may not have been new but I felt its time had come, for a number of reasons:
Economics was going through another intellectual turbulence, at least in the Western world,
triggered by the global financial crisis and reflecting an emerging recognition that traditional
policy approaches were unlikely to be adequate to confront the complex challenges of the
modern era, such as the impact of deep international interconnectedness, technological and
climate change, along with growing social disconnection and lack of trust in established
institutions;
For me it was noticeable that the emerging recognition of the need for different policy
approaches was not reflected in the dominant public policy narrative in New Zealand at the
time. Commentators and policy practitioners appeared to be trapped in a frame of reference
that seemed to me at best to be outdated;
Apart from the Treasury's 2011 paper, Joe Stiglitz, Amartya Sen and Jean-Paul Fitoussi's
2009 Report had helped shape my thinking, as had the Australian Treasury's own wellbeing
framework (and I recall David Gruen coming to Wellington in 2011 to talk about their work)
as well as work by many other economists. Increasingly I felt that public policy had become
stuck in out-dated frameworks and that, to a certain extent, we needed to return to first
principles and adopt a multi-disciplinary approach to economic policy-making;
As Secretary, I also felt the Treasury had a responsibility, as New Zealand's economics and
finance ministry, to turn its vision - working towards higher living standards for New
Zealanders - into a statement of possibility rather than one of aspiration. But we had to start
with developing a framework that was intellectually rigorous, that would challenge the
dominant policy paradigm, that was robust enough to meet the challenges that would be
thrown at it and that could create a new narrative. Effective public policy needs an effective
narrative;
Developing that framework was Girol's job. His enthusiasm for the potential of economics
chimed with mine. His intellectual curiosity, and his passion for the living standards agenda
rubbed off on many of those he recruited to work on the issues and turn the aspiration to a
possibility.
That possibility has grown but the journey is not over. Today's book launch allows us to reflect
on what has been achieved and to take stock of what remains to be done. As a central banker
who is concerned with macroeconomic stability, I am particularly interested in the management
of risk and the development of what I've described as economic resilience, or the ability of
communities to manage economic transitions, whether they are sudden shocks or more gradual
movements, all of which are at the heart of intergenerational wellbeing and the challenge of our
times.
Thank you for inviting me to the launch and congratulations again to Girol.