ABSTRACT
This chapter assesses both the aggregate growth effects and the distributional consequences of financial liberalization as observed in Thailand from 1976 to 1996. The intermediated sector is allowed to expand exogenously at the observed rate in the Thai data, given initial participation and the initial observed distribution of wealth. The general equilibrium models of A. Banerjee and A. Newman, T. Piketty, and P. Aghion and P. Bolton take different stands on those underpinnings but collectively make the point that growth and inequality can be related to imperfect credit markets. The chapter describes the core of the model as given in an occupational choice map. We use the explicit structure of the model as given in the occupation choice and investment decision of households to estimate certain parameters of the model. Any calibration exercise requires a metric to assess how well the model matches the data.
