Mendonça, AntónioSilvestre, JoãoPassos, José2025-01-272025-01-272007Mendonça, António; João Silvestre and José Passos .(2007). “The shrinking endogeneity of optimum currency areas criteria : Evidence from the European Monetary Union - a beta regression approach “, The 6th Inha – Le Havre International Conference, Incheon, Republic of Korea. 10th- 11 th October, 2007http://hdl.handle.net/10400.5/97813The endogeneity of optimum currency areas criteria has been widely studied since Frankel and Rage (1998) seminal paper Literature normally suggests frat there is a positive between trade business cycles correlation. This paper develops work on this subject (Silvestre and Mendonça 2007) where we confirm this hypothesis in real countries and UE-15 for 1967-2003 period using OLS and 2SLS estimates. However, we also find then that trade influence on cycles synchronization in the last years. Now our goal was precisely to evaluate this question. Using a non-linear model based on Beta distribution in the same sample, we concluded that trade has a decreasing marginal effect on business cycles correlation. This result shows that trade flows are important in the first stages of economic integration, but become less important as trade increases. Other must then be considered.engEuropean Monetary Union (EMU)Business Cycle CorrelationOptimum Currency AreasBeta Regressionjournal article