| In this dissertation, we first systematize the cluster-discriminant analysis procedure. We also derive a generalized formula for the between-group component of the Theil index, and clarify several important characteristics of Theil index that have not been explored by the literature, namely, nested group structure, addivity, nonnegativity, and most importantly, self-similarity.; Then we apply these methods to study China's income inequality and Asian financial crisis. We find that China, like other countries in transition, experienced continuous income inequality increases since it adopted a reform policy in the late 1970s. Cluster-discriminant analysis shows that the dominant forces affecting industrial wage performance in China is the GDP growth rate, while the industrial policy also plays a role.; We also study the relationship between inequality and financial crisis. The map presentation based on the Theil indices cross countries shows that while there is similarity among Asian countries in GDP growth, there is no common underlying industrial structure among the countries. These patterns of similarity and dissimilarity of Asian economy have contributed to the financial crisis since mid-1997. Based on data from financial crises since 1970, we further discuss the social effects of financial crisis and offer our explanations.; Finally, our case study on Thailand shows that financial problems in Thailand were brought about by inconsistencies among financial liberalization, pegged exchange rate and monetary policies. We conclude that problems in Thailand's financial sector had a huge influence on its real economic sector, because they pushed interest rate high and caused real appreciation of the Thai Baht. |
