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In this paper, the authors present an empirically stable money demand model for Euro area M3. They show that housing wealth is an important explanatory variable of long-run money demand that captures the trending behaviour of M3 velocity, in particular its shift in the first half of this decade. They show that the current financial crisis has no impact on the stability of the money demand model. Achieving and maintaining price-level stability in the medium and long term in the Euro area is the single ultimate goal of the ECB's monetary policy.
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