This document proposes a general macroeconomic framework to analyze the behavior of inflation. This approach has two characteristics. The first is the distinction of monetary regimes based on the number of shocks that have a permanent effect on the price level. When all shocks have a permanent...

We propose a method, based on the currency union model of Gali and Monacelli (2008), to determine whether a region belongs to an existing optimal currency area. The method involves assessing the predictability of regional inflation rates at medium term horizons. We apply the methods to the...