But inflation in such a situation is not necessarily caused by the quantity of money; rather the quantity of money may be caused by and consistent with the inflation rate resulting from the three basic equations in which the money stock does not appear – in particular from the gap between the natural and actual rates of interest.
If the results achieved in the battle against inflation were only partial during Baffi’s governorship, the successes that came in the course of the 1980s and 1990s can be traced to the seeds he had sown with his commitment to a new monetary constitution. During his Governorship the question of separating the responsibilities of government and central bank was posed.