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.