Abstract:
his paper has investigated the money demand for Australia economy in 1974 -2007 and the affects of financial crisis on money demand and its changes on real income, inflation and exchange rate. Also this studies the trend of changes in money demand stability and the other variables via Auto Regressive Distributed Lag (ARDL) and Error Correction Method (ECM) in dynamic analysis.The coefficient of Gross Domestic Production (GDP) is positive and significantly more than 1. Inflation rate variable is negative expectedly. The significant positive coefficient related to the last financial crisis demonstrates that the money demand will increase. Of course, the short-run affect is negligible and its affects become obvious in long-run.
