A collection of articles presented at the XLVI Applied Econometrics Association conference on exchange rates held in Heigerloch Castle, Germany), in 1995. The book consists of three parts examining the experience of the exchange rate in Europe. In the first part some aspects of exchange rate determination in Europe are examined; the second part deals with the exchange rate policy within the European Monetary System; in the third part an analysis of recent intervention practices in the European exchange rate markets is presented.

List of Tables - List of Graphs - Notes on the Contributors - Presentation and Synthesis of the Volume; P.Karadeloglou - Introduction; R.Raymond - PART 1: ECONOMETRIC ASPECTS OF EXCHANGE RATE DETERMINATION IN EUROPE - Are Dollar Exchange Rates Cointegrated after All?; E.Girardin & V.Marimoutou - Modelling Exchange Rates Using MARS; J.de Gooijer & H.Krager - Sterling's Relationship with the Deutschmark: a Probabilistic Reduction Approach; G.M.Caporale & N.Pittis - Purchasing Power Parity and Cointegration: the Case of Greek Exchange Rates; G.Hondroyiannis & E.Papapetrou - PART 2: EMS AND EXCHANGE RATE POLICY - German Interest Rates and the European Monetary System; P.J.G.Vlaar - Currency Substitution and Exchange Rate Policy within the European Union; E.Pentecost - Budgetary Implications of a European Central Bank: a Purely Strategic Perspective; B.van Aarle, A.L.Bovenberg & M.G.Raith - PART 3: INTERVENTION ON EUROPEAN EXCHANGE RATE MARKETS - Target Zones: Testing the Intervention Mechanism for the European Currencies; P.Karadeloglou & C.Papazoglou - Modelling the Behaviour of Exchange Rates in the EMS; A.Parikh & C.Karfakis - Intervention Policy on the Foreign Exchange Market: a Tale of Dissidents and Conformists; A.Cartapanis & P.Laurent - Index