aeo A topical subject of concern to all European countries. aeo The subject is addressed by a collection of top ranking economists with emphasis on real world policy. aeo This book is part of the well established SJE series and so quality is guaranteed.

1. Contagious Currency Crises: First Tests: Barry Eichengreen (University of California, USA) and Andrew Rose (University of California, USA) and Charles Wyplosz (Graduate Institute of International Studies, Geneva). 2. The Credibility of a Fixed Exchange Rate - How Reputation is gained or Lost: Steinar Holden (University of Oslo, Norway) and Birger Vikoren (Norges Bank, Norway). 3. Would a Tobin Tax have Saved the EMS?: Olivier Jeanne (CERAS, Paris). 4. Financial Market Integration and Macroeconomic Volatility: Alan Sutherland (University of York, UK). 5. Monetary Integration in Europe: Implications for Real Interest Rates and Stock Markets: Matthew B. Canzoneri (Georgetown University, Washington, USA) and Harris Dellas (Catholic University of Leuven, Belgium). 6. Exchange Rate versus Price Level Targets and Output Stability: Asbjorn Rodseth (University of Oslo, Norway). 7. Does Financial Deregulation Cause a Consumption Boom?: Jonas Agell (University of Uppsala, Sweden) and Lennart Berg (University of Uppsala, Sweden). 8. Inviting Excess Volatility? Opening Up a Small Stock Market to International Investors: Peter Sellin (Sveriges Riksbank, Sweden).

Most advanced countries have recently deregulated their credit markets and international capital movements have been liberalized. Over the same period, we have also experienced volatile financial markets and exchange rate crises, particularly in a number of European countries. This naturally raises the question of whether financial liberalization has affected macroeconomic stability and, if so, through which channels. As capital markets are liberalized, exchange rate crises may become more contagious. Empirical evidence indicates that this has been underlying the recent crises in the European currency market. This phenomenon has renewed our interest in the fundamental factors determining credibility of exchange rate policies and whether a Tobin tax on foreign exchange transactions could mute speculative pressure and stabilize the international monetary system. Macroeconomic stability towards different types of shocks may change as a result of both further capital market integration and monetary arrangements related to exchange rate management. This also raises the question of how the choice of operating targets for monetary policy affects macroeconomic stability. Seen from a single country perspective, capital market liberalization has had its most important effects by facilitating households' access to credit markets and opening up financial markets to foreign investors. This volume brings together theoretical and empirical contributions addressing these issues.

1. Contagious Currency Crises: First Tests: Barry Eichengreen (University of California, USA) and Andrew Rose (University of California, USA) and Charles Wyplosz (Graduate Institute of International Studies, Geneva). 2. The Credibility of a Fixed Exchange Rate - How Reputation is gained or Lost: Steinar Holden (University of Oslo, Norway) and Birger Vikoren (Norges Bank, Norway). 3. Would a Tobin Tax have Saved the EMS?: Olivier Jeanne (CERAS, Paris). 4. Financial Market Integration and Macroeconomic Volatility: Alan Sutherland (University of York, UK). 5. Monetary Integration in Europe: Implications for Real Interest Rates and Stock Markets: Matthew B. Canzoneri (Georgetown University, Washington, USA) and Harris Dellas (Catholic University of Leuven, Belgium). 6. Exchange Rate versus Price Level Targets and Output Stability: Asbjorn Rodseth (University of Oslo, Norway). 7. Does Financial Deregulation Cause a Consumption Boom?: Jonas Agell (University of Uppsala, Sweden) and Lennart Berg (University of Uppsala, Sweden). 8. Inviting Excess Volatility? Opening Up a Small Stock Market to International Investors: Peter Sellin (Sveriges Riksbank, Sweden).