"The existence of a stable long-run demand for money is important for conducting monetary policy for two main reasons: first, a stable demand for money represents a prerequisite for supplying an adequate quantity of money in accordance with the needs of businesses and households; second, the stability of the demand for money is a necessary condition for implementing monetary policy strategies in which monetary aggregates have a prominent role. Our main goals are to analyse the longrun relationship between money and several other variables in Macedonia; to examine the short-run dynamics of the demand for money; and to assess the properties of stability of the money demand function. The properties of the long-run demand for money are explored within the context of a co-integration approach, while the short-run dynamics are analysed employing an error-correction model. Our research reveals that the income elasticity of the demand for money is less than unitary, the short-run adjustment toward long-run equilibrium is rather slow and the estimated demand for money seems to be quite stable. "

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