Thursday, December 3, 2009

Krugman Recognizes that the Tobin Tax Isn't "Working Very Well" in Brazil

During an interview in São Paulo, Krugman recognized that the Tobin tax isn't "working very well," something that I discussed in this post a few days ago. This shouldn't be a surprise to him, for the reasons explained in the same post and also here. Strangely, he insists in not opposing it. Here's my translation of the original article from the estadao.com.br, which is in Portuguese:
He did not oppose the tax (called IOF) on capital inflows adopted recently by the Brazilian government, at a rate of 2% on foreign investments in stocks and government bonds. But he observed that the measure is not “working very well.”

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