摘要：This paper examines the issue of whether harmonising taxes across the traded and non-traded sectors is desirable. Preferential treatment for the traded sector might be justified if eitherthe output response of subsidies are higher in the traded sector or if the jobs generated in thetraded sector are "better" than those in the non-traded sector. I examine these two issues using asimple two sector small open economy model to analyse the first question and input-output analysisto analyse the second. I conclude that there is no compelling argument for lower taxes on the tradedsector.
