ABSTRACT
The FHC Stabilization Plan consists of three stages, one of which is a monetary reform where a new money-of-account is initially created as the basis for a new money proper to be issued later to replace the cruzeiro real. The paper explores the differences between indexation and monetary reform in the light of the distributive inconsistencies generated by a high inflation regime. It is shown that the possibility of explosive solutions to the coordination problem during the transition for new money is much increased by the rules proposed by the government.
KEYWORDS:
Stabilization; inflation; Real Plan