This paper examines the effects of capital inflows and domestic factors on Brazil’s real exchange rate. It describes …

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 …

implementing them. We focus on Brazil, which instituted five changes in its capital account regime over 2008 - 2011. Using the … synthetic control method, we construct counterfactuals (i.e., Brazil with no policy change) for each of these changes. We find … regarding the government's larger intentions and sensibilities. In the case of Brazil, its left-of-center government …