This volume assesses issues such as the prospects for inflation convergence, long-term growth and regional policy, and the integration of financial markets and fiscal systems, following the establishment of the economic and monetary union in the European Community in the aftermath of the Maastricht Treaty.

1. Introduction Francisco Torres and Francesco Giavazzi; 2. Economic and monetary union: critical notes on the Maastricht Treaty revisions Niels Thygesen; Discussion Lorenzo Bini Smagha, Victor Gaspar, Jose Vinals; 3. The design of optimal fiscal rules for Europe after 1992 Giancarlo Corsetti and Nouriel Roubini; Discussion Axel A. Weber; 4. Contracts, credibility and common knowledge: their influence on inflation convergence Marcus Miller and Alan Sutherland; Discussion David Backus, Michael Dooley; 5. Inflation in fixed exchange regimes: the recent Portuguese experience Sergio Rebelo; Discussion Michael Moore, Guido Tabellini; 6. Models of economic integration and localised growth Giuseppe Bertola; Discussion Joao Cesar das Neves, Charles Wyplosz; 7. Shocking aspects of European monetary integration Tamim Bayoumi and Barry Eichengreen; Discussion Giorgio Basevi, Patrick Minford; 8. Lessons of Massachusetts for EMU Paul Krugman; Discussion Alessandra Casella, Paul de Grauwe; 9. Financial and currency integration in the European monetary system: the statistical record Jeffrey Frankel, Steven Phillips and Menzie Chinn; Discussion Rudiger Dornbusch, Paolo Onofri; 10. Currency substitution: from the policy questions to the theory and back Matthew Canzoneri, Behzad Diba and Alberto Giovannini; Discussion Lucas Papademos, Antonio S. Mello; 11. Coordination of capital income taxes in the economic and monetary union: what needs to be done? Peter B. Sorenson; Discussion Alberto Giovannini; Index.