Introduction. ECONOMETRIC MODELLING. Use of Mainstream Macroeconometric Models for Policy Formation (L.R. Klein). The Emphasis on Realistic Structure. Procedures. Treatment of Uncertainty. New Vistas. Comments by P. Kukkonen. Consistent Expections and Learning in Large Scale Macroeconometric Models (D. Currie, A. Garratt, S. Hall). Introduction. Solution Procedures. Terminal Conditions. Stochastic Simulations. Policy Formulation. Types of Rational Expectations. Rational Expectations in Forecasting. Rational Expectations and Policy. Relaxation of the Rational Expectations Hypothesis. Learning. Learning and Convergence. Model Consistent Learning. Learning about a Change in Exchange Rate Regime. Conclusion. Comments by U. Lempinen. GENERAL EQUILIBRIUM MODELLING. Accounting for Long-Run Effects of Fiscal Policy by Means of Computable Overlapping Generations Models (E. Steigum, Jr.). Introduction. Some Methodological Issues. An Analytical Framework. A Computable Overlapping Generations Model. The Long-run Effects of Social Security Funds. Final Remarks. Comments by P. Haaparanta. Policy Analysis with Modern Business Cycle Models (T.F. Cooley). Introduction. A Model Economy. Calibration and Solution of the Model. Tax Reforms. War Finance. Optimal Fiscal and Monetary Policy. Conclusions. Comments by S. Honkapohja. EXCHANGE RATE POLICY. Credibility of Finland's Basket Peg Exchange Rate Regime: 1977-1991 (P. Pikkarainen, L. Vajanne). Introduction. On the Relationships of the Exchange Rate Policies of Finland, Sweden and Norway. Devaluation Expectations: The Finnish Markka 1987-1991. Capital Flows and Credibility: Modified Kouri-Porter Analysis. Bumpy Road. Comments by E. Steigum, Jr. EUROPEAN ECONOMIC INTEGRATION. Fiscal Federalism and European Monetary Integration (J. Tarkka, J. Akerholm). Eurofed and Inflation. EMU and Asymmetric Shocks. Concluding Remarks. Comments by D. Currie. Tax Policy in a Single European Market (M. Daly). Introduction. Principal Tax Differences Between EC Countries. The Role of the Corporation Tax in a Single Market. Taxation and Allocative Efficiency in a Single Market. Equity Aspects of International Taxation. Administrative Feasibility and Simplicity. Transparency. The Effectiveness of Tax Incentives for Investment in a Single Market. Tax Convergence and the Threat Posed by Tax Competition to Corporate Tax Revenues. Policy Implications. Obstacles to Tax Harmonisation. Conclusions. Comments by M. Ingberg.