This article provides an overview of recent research into the macroeconomic costs and benefits of monetary unification. We are primarily interested in Europe’s monetary union. Given that unification entails the loss of a policy instrument its potential benefits have to be found elsewhere....

The use of forward interest rates as a monetary policy indicator is demonstrated, using Sweden between 1992 and 1994 as an example. The forward rates are interpreted as indicating market expectations of the time-path of future interest rates, future inflation rates, and future currency...

In this paper we analyse how the creation of a single currency regime changes the strategic relationship between policy-makers, both within and across countries. In particular we look at the role of cross-country externalities and lack of commitment. When labour taxation is excessive, due to...