The paper provides an analysis of the first three years of the European Monetary Union. It discusses the changeover to Euro notes, the performance of monetary policy in terms of price stability and real growth, the establishment of credibility for the ECB, and the two pillar strategy. The...

The discussion on exchange rate policy is dominated by the so-called “impossible trinity”. According to this principle an autonomous monetary policy, a control over the exchange rate and free capital movements cannot be achieved simultaneously. In this paper, a strategy of managed floating...