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This paper analyses euro area Non-Financial Corporations (NFC) money demand, both from a macro and a microeconomic point of view. At a macro level, money holdings are modeled as a function of real gross added value, the price level, the long-term interest rate on bank lending to non-financial corporations, the own rate of return on M3 and the real capital stock of the NFC sector. The results indicate that NFCs' money holdings adjust quickly when deviations from their long-run level are registered and that the large increase observed recently in NFCs' money holdings has been driven by changes in their fundamentals and hence they stand in line with their long-run equilibrium level.
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