A NOBEL laureate has warned developed countries against closing their economies to free trade as a way of dealing with job losses.

Professor Michael Spence, winner of the 2001 Nobel prize in economics, told a gathering here on Wednesday that they should instead think hard about how to improve income distribution in their societies.

The warning from the Stanford University don comes against a backdrop of slowing growth in the United States, which has led to a resurgence of protectionist calls, especially in relation to trade with China.

There was a confusion - 'even among very smart people' - on how best to tackle rising income inequality and job losses in their countries, he said.

He was addressing academics and executives at the Institute of Policy Studies (IPS) Second Nobel Laureate Lecture held at the Orchard Hotel.

Prof Spence chaired the World Bank's high-profile Commission for Growth and Development, which identified ingredients for sustained high growth in a report released in May this year.

In his 45-minute lecture focused on the report's key findings, he stressed that economic growth must be inclusive if it is to be sustained.

Read the full story in Thursday's edition of The Straits Times.