The second edition of this widely acclaimed text presents a thoroughly up-to-date intuitive account of recent developments in econometrics. It continues to present the frontiers of research in an accessible form for non-specialist econometricians, advanced undergraduates and graduate students wishing to carry out applied econometric research. This new edition contains substantially revised chapters on cointegration and vector autoregressive (VAR) modelling, reflecting the developments that have been made in these important areas since the first edition. Special attention is given to the Dickey-Pantula approach and the testing for the order of integration of a variable in the presence of a structural break. For VAR models, impulse response analysis is explained and illustrated. There is also a detailed but intuitive explanation of the Johansen method, an increasingly popular technique. The text contains specially constructed and original tables of critical values for a wide range of tests for stationarity and cointegration. These tables are for Dickey-Fuller tests, Dickey-Hasza-Fuller and HEGY seasonal integration tests and the Perron 'additive outlier' integration test.

In March 1998 the European Union formally launched the accession process that will lead to a significant enlargement of the Union. So far ten countries from Central Europe: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic and Slovenia have submitted their applications for EU membership. This unique process immediately attracted attention of economists and policy makers. Nevertheless, it can be noticed that among numerous results already published, there is a distinctive shortage of books and papers in which quantitative research methods are applied. This is to a large extent justified by the fact that the transition and accession processes are new to the economic sciences, their methodology is not wellresearched, statistical data for the Central and East European countries are scarce and not always reliable and, generally, quantitative approach seems to be a risky and uncertain business. All these all problems can also be seen as a challenge rather than an obstacle. With this on mind, we have decided to clarify the status quo by organising a research seminar which focused on the methodology and quantitative analysis of the Central and East European transition and pre-accession processes. The seminar, East European Transition and EU Enlargement: a Quantitative Approach organised by Macroeconomic and Financial Data Centre (University of Gdansk and University ofLeicester) took place in Gdansk in June 2001. Our edited volume contains papers developed from this seminar.