Investigates how the Euro has affected trade, financial markets, macroeconomic policy making and Europe's economic performance since it came into operation in January 1999. This book covers topics such as inflation measurement, price stability, fiscal policies and monetary policy.

Introduction.1. Policy Challenges of Euro Area Enlargement: Lucas Papademos.2. The Currency Union Effect on Trade: Early Evidence from EMU: Alejandro Micco, Ernesto Stein and Guillermo Ordonez.3. Divergent Inflation Rates in EMU: Patrick Honohan and Philip R. Lane.4. Inflation Measurement and the ECB's Pursuit of Price Stability: A First Assessment: Stephen G. Cecchetti and Mark A. Wynne.5. The Execution of Monetary Policy: A Tale of Two Central Banks: Leonardo Bartolini and Alessandro Prati.6. Monetary Transmission in the Euro Area: Early Evidence: Ignazio Angeloni and Michael Ehrmann.7. Yield Spreads on EMU Government Bonds: Lorenzo Codogno, Carlo Favero and Alessandro Missale.8. Fiscal Policy and Monetary Integration in Europe: Jordi Gali and Roberto Perotti.9. Life on the Outside: Economic Conditions and Prospects Outside Euroland: David Barr, Francis Breedon and David Miles.