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The IMF Needs Fresh Thinking on Capital Controls

The IMF has slapped Brazil's wrist for daring to impose a 2% tax on short-term capital inflows. But such capital controls make a lot of sense, because “hot” inflows make it difficult for financially open economies like Brazil to maintain a competitive currency, depriving them of what is in effect the most potent form of industrial policy imaginable.

CAMBRIDGE – Why does the International Monetary Fund make it so hard for people like me to love it?

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