This valuable textbook on monetary integration has been fully revised and updated to provide the most reliable and up-to-date analysis available of the costs and benefits of monetary union in Europe. De Grauwe has expanded his coverage of the rise and fall of the European Monetary System, included full discussion of the events of 1993, presented new theoretical arguments, and offered a critical analysis of the possibility of transition to a full monetary system. His lucid and comprehensive analysis will continue to be an important source for undergraduate and graduate students.