Labour market Industrial policy Ireland Tax rates Tax harmonisation
Economic & Social Research Institute
Walsh, Frank. 'Labour market rents and Irish industrial policy'. - Economic & Social Review, Vol. 30, No. 4, October, 1999, pp. 363-380, Dublin: Economic & Social Research Institute
This paper examines the issue of whether harmonising taxes across the traded and nontraded sectors is desirable. Preferential treatment for the traded sector might be justified if either the output response of subsidies are higher in the traded sector or if the jobs generated in the traded sector are “better” than those in the non-traded sector. I examine these two issues using a simple two sector small open economy model to analyse the first question and input-output analysis to analyse the second. I conclude that there is no compelling argument for lower taxes on the traded sector.
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