The role of money as an important pillar for monetary policy: The case of Albania

The main focus of this paper is to appraise the money demand function and the velocity of broad money, M3, in the medium and long-term, given its role as a second pivotal pillar for the monetary policy of the Bank of Albania, in accordance with its primary objective, that of price stability. The results show that the demand for money is stable, even in the aftermath of global financial crisis, as well as its performance contains important information for the inflation trend.