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Notes on money, debt and alternative monetary regimes for Brazil* * Prepared for The Development Policy Group, in the Vice-President of Economics Office of’ the World Bank. The views expressed are however personal and should not be identified with those of the World Bank in anyway.

ABSTRACT

This note analyzes, based on a simple model, the contribution of three authors (Rodriguez, Meltzer and Auerheimer) to the debate on inflation in Brazil and ways to overcome it. The hypothesis of adopting a currency board regime, as suggested by the three authors, and its implications for Brazil are discussed in more detail. As an alternative, it is suggested to adopt a monetary regime inspired by Hayek, in which there is competition between private banks for the issue of currency.

KEYWORDS:
Money supply; monetary regime; central bank

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