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...

We examine whether standard theoretical models of inflation forecast targeting are consistent with the observed behaviour of the central banks of Australia, Canada, and the United States. The target criteria from these models restrict the conditionally expected paths of variables targeted by the...