This paper explores the stability of the relation between money demand for M3 and inflation in the euro area by …

Money growth in the euro area has exceeded its target since 2001. Likewise, recent empirical studies did not find …) estimation methods. To obtain the result, the short run homogeneity restriction between money and prices is relaxed. In addition …, a rise in the income elasticity after 2001 is taken into account. The break might be linked to the introduction of euro …