ABSTRACT
This chapter focuses on the macroeconomic decision-making process that resulted in the Cruzado Plan and its subsequent additions and amendments. The initial months of the Sarney presidency were spent in an attempt to give shape to the ideals behind the transition to civilian rule and the drafting of a so-called democratic agenda. In agrarian reform, for example, a detailed and moderate plan was proposed; by the time it became law, the project fell short even of the timid goals of the military's Estatuto da Terra. The precedent was established whereby the New Republic's first fundamental attempt at reform, apart from the embattled Agrarian Reform, emerged from a narrow and arguably undemocratic decision-making process. Inflation climbed slowly to its highest level since the beginning of the Cruzado Plan: 2.24 percent monthly rate in the Sao Paulo area; the reversal of the downward price trend of foodstuffs was the main cause for the inflationary surge.
