determinant of capital inflows to Brazil. The magnitude of those flows exacerbated two main macroeconomic problems: an increase in …

We use changes in Brazil s tax on capital inflows from 2006 to 2011 to test for direct portfolio effects and …. We find that an increase in Brazil s tax on foreign investment in bonds causes investors to significantly decrease their … portfolio allocations to Brazil in both bonds and equities. Investors simultaneously increase allocations to other countries …