Gail (University of Siegen) examines the role of habit formation in consumption in explaining persistent behaviour of inflation and output in response to monetary shocks using a stochastic dynamic general equilibrium model. Dreger (IWH) and Reimers (Hochschule Wismar) analyse cointegrating relationships between consumption, disposable income and financial wealth by means of paneleconometric techniques. Borbély (European Institute for International Economic Relations) and Meier (Kiel Institute for World Economics) discuss the relevance of uncertainty around macroeconomic forecasts, where uncertainties cover model selection, model specification and parameter estimates. Chen and Flaschel (University of Bielefeld) investigate the behaviour of wage and price Phillips curves for high and low inflation regimes. Pitfalls in the application of the HP to macroeconomic time series are stressed in the paper of Meyer and Winker (University of Erfurt). Jumah and Kunst (University of Vienna) propose nonlinear error correction methods to model simultaneously the need of vary-ing shares of subaggregates of demand components and the long-run constancy of the shares of total demand aggregates to output. According to Weyerstraß (Institute for Advanced Studies, Carinthia), final demand is the main factor explaining divergence of investment in a panel of European countries. Kosfeld, Eckey (University of Kassel) and Dreger (IWH) investigate the hypothesis of conditional convergence for German regional labour markets using spatial econometric methods. Jaenicke and Reiter (Univer-sity of Osnabrück) analyse the development of the German beef market during the BSE crisis. Ochsen (University of Oldenburg) presents a new indicator for mismatch in OECD labour markets, which is based on the Beveridge curve. Frenkel (WHU Koblenz), Pierdzioch (Kiel Institute for World Economics) and Stadtmann (WHU Koblenz) examine the intervention policy of the Bank of Japan in the Yen/US Dollar for-eign exchange market over the last decade. Sauer (Univerity of Munich) and Sturm (University of Konstanz) discuss the impact of alternative measures on the output gap in interest rate reaction functions. Scharnagl and Tödter (Deutsche Bundesbank, Frank-furt) discuss automatic stabilizers and their relationship to the Ricardian equivalence theorem. Using the Bundesbank’s multicountry model, they present estimates of the smoothing power for Germany and some other OECD countries.