ABSTRACT
Poverty is always the number one obstacle of an economy. Economic growth is believed to be the elixir to cure this disease since empirical studies suggest that the elasticity of poverty reduction with respect to economic prosperity is positive (Bulírˇ, 2001; Jitsuchon, 2006; Krongkaew et al., 2006; Warr, 2000; and Warr, 2004). Still, there are no clear-cut studies pointing out that economic growth alleviates income inequality (Krongkaew et al., 2006; Warr, 2003; Warr, 2004). The relationship between poverty, growth and inequality has been a big issue in development economics. A speci c study of one economy, Thailand in particular, should give a clearer picture of how the economy reacts and solves these di culties.
