Endogeneity of OCA Criteria in the Context of EMU Periphery

This study examines the hypothesis of an endogenous nature of the business cycles synchronization of countries forming a monetary union, based on the Theory of Optimum Currency Areas (OCA). The model analyzes alignment of business cycles correlation between the core countries and the periphery of the European Monetary Union. Using tests of cointegration and OLS examines the presence of long-term or short-term synchronization of the cycles. After comparing the measured values of synchronization before and after joining the EMU with contribution of Differences-in-Differences method concludes the endogenous nature of business cycles correlation between peripheral and core EMU countries