| Abstract: | The relationship between industrial protection and income distribution has been of considerable interest among economists. Although the literature generally focuses on the returns to primary factors of production as measures of income distribution, this paper attempts to clarify the relationship in terms of poverty and income inequality. Simulation results of a general equilibrium model based on Thai data show that a move toward free trade would lead to a more equal distribution of income. However, it would also lead to a government budget deficit. The way the government chooses to finance the deficit could have important consequences for income distribution and economic growth. |
