Whither Neoliberalism?: Its Validity for A New International Trade Order

One of the major serious issues in economics these days is the issue of income inequality. Some argue that neoliberalism has caused income inequality because the free market economy has not been able to distribute income in a fair and even way. This argument goes one step further that inequality was caused by free trade that has been promoted by the WTO. This study attempted to verify if this argument is acceptable when a more balanced statistical analysis is applied. The findings includes: (1) Income inequality has not been deteriorated worldwide since the WTO was launched; (2) Some developed economies may indeed have experienced deterioration of inequality, but it was not because of neoliberalism but rather because of domestic mis-management of the labor market and government s policy mistakes for income redistribution; (3) The free trade system run by the WTO should be maintained and Korea should take initiative for that as the world s 7th largest trading country.