Within the framework of a modified version of the P-star model (Hallman, Porter, Small 1991) we check, whether a long run relationship between the rate of inflation and the growth rate of money supply existed in Poland in the period 1993-2000. Relying on cointegration analysis, we choose combinations of monetary aggregates and inflation measures that best describe the long run relationship of money and prices. The cointegrating equations, estimated with Johansen tests are used to build vector error correction models and to estimate the influence of the inflationary gap on future inflation. The results confirm a strong relationship between M1 and various measures of inflation. Surprisingly, the performance of M2, having been indirect target and reference value for monetary policy in the 90´s, proved very weak.

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