This paper examines the relevance of the Lucas critique for euro area money demand. Based on the money in the utility function
approach, a vector error correction model is specified to investigate the relationship between money and inflation in times
of policy shifts. A well defined equation for money demand is obtained. The results indicate that the evolution of M3 is still
in line with money demand. In the long run, inflation is affected by asset prices and detrended output. Our results show that
the Lucas critique can be refuted in case of euro area money demand for the period of quantitative easing. Thus, the estimated
money demand equation provides reliable information for the conduct of future monetary policy.