The aim of the summer school was to foster a research network amongst Western and Eastern European economist working on transition economics and capital markets. In the core workshop of 3 days J. Hanousek (CERGE, Charles University Prague), R. MacDonald (Univ. of Strathclyde) and R. Portes (London Business School) gave lectures on international finance, exchange rate economics and applied econometric studies with regard to Central and Eastern European countries. In the afternoon the papers of the 15 external participants (from Eastern and Western European countries) were presented and discussed. The topics of the papers were exchange rate economics, monetary policy and behaviour of stock returns. In the week following the core workshop 4 participants stayed at the ZEW for an extended research visit.