ABSTRACT
The present paper examines various episodes of the monetary history of Brazil and other countries as well as the recent empirical evidence to look into critically the two principal proposals of monetary constitution for Brazil: currency board and independent central bank proposals. We outline also a monetary constitution inspired in the Pandiá Calógeras’s Monetary Project (1926CALÓGERAS, João Pandiá (1926) Projeto Monetário, dec.) with the only purpose of shedding light on the basic principles involved in the design of a monetary constitution aimed at controlling the power to create money and curbing inflation: (a) separation between the power to create money and the agents that determine public expenditure; (b) a clear monetary rule to constraint the power to create money; and (e) separation of the power to create money from the regulation and supervision of banks.
KEYWORDS:
Monetary constitution; stabilization; quantity theory of money; inflation; money supply