<u>Table 2: Summary of Empirical Findings using the BEER Approach</u>

|**Paper**|**Country**|**Time**|**Conditioning variables and cointegrating coefficients**|
|---|---|---|---|
|Feyzioğlu (1997)|Finland|1975–1995|world real interest rates (0.03), productivity differential (0.85), terms of<br>trade (0.37), devaluation dummy (-0.14).|
|Zhang (2001)|China|1952–1997|investment at constant prices as proxy for technological progress (0.37),<br>exports growth rate as proxy for terms of trade (-3.4), government<br>consumption in current prices (-0.32), total trade as % of GDP as proxy<br>for commercial policy (0.88).|
|MacDonald and<br>Ricci (2003)|South Africa|1970:Q1–2002:Q1|real interest rate differential (0.03), GDP per capita differential (0.13),<br>real commodity prices (0.45), trade openness (-0.01), fiscal balance (-<br>0.02), net foreign asset position (0.01).|
|Maeso-Fernandez<br>et al. (2004)|<br>CEE acceding<br>countries|1975–2002|income per capita as a proxy for productivity (0.40), trade openness (-<br>0.17), government spending (0.31).|
|Nilsson (2004)|Sweden|1982:Q1–2000:Q4|real interest rate djfferential (exogenous, stationary), relative price of<br>tradables to nontradables (-0.46), terms of trade (0.65), net foreign debt<br>as % of GDP (-0.10).|
|Babetskii and<br>Égert (2005)|Czech Republic|1993:M1–2004:M9|average labour productivity differential [0.7, 2.2], net foreign assets<br>position [0.04, 0.60].|
|Iimi (2006)|Botswana|1985–2004|real interest rate differential (0.024), relative prices of nontradables to<br>tradables (1.35), terms of trade (0.29), net foreign asset position (-0.003,<br>|
||||unexpected sign).|
|Iossifov and|Ghana|1984:Q2–2006:Q3|real interest rate differential (1.1), real GDP per capita growth|
|Loukoianova<br>(2007)|||differential (4.7), real world prices of Ghana's four main export<br>commodities (0.35).|
|MacDonald and<br>Dias (2007)|Canada, China, Japan,<br>Germany, Norway,<br>Singapore, Sweden,<br>Switzerland, U.K and<br>U.S.|<br>1988:Q1–2006:Q1|real interest differential [-0.09, 0.06], net exports as a proportion of<br>GDP [-178, -1.34], terms of trade differential [-4.1, 2.4], GDP per<br>capita differential [-1.5, 1.5].|
|Yajie et al. (2007)|China|1980–2004|interest rate differential (not included due to capital controls), relative<br>price of tradables to nontradables as a proxy for productivity divergence<br>(1.25), terms of trade (not signif.), money supply (-1.18), central bank<br>foreign reserve holdings (0.86).|
|Ricci et al. (2008)|panel of 48 countries<br>using DOLS|1980–2004|productivity based on sectoral breakdown for tradables (0.17) and<br>nontradables (-0.21), commodity terms of trade (0.56), net foreign<br>assets as % of trade (0.04), government consumption as % of GDP<br>(2.84), trade restrictions dummy (0.13), and price controls based on<br>share of administered prices in the CPI basket (-0.04).|
|Bénassy-Quéré e|t<br>panel of G20|1980–2005|real interest rate differential (excl. due to stationarity), alternative|
|al. (2009)|countries||measures of productivity differentials such as CPI-to-PPI ratio (0.88),<br>services to agriculture and industry deflators (0.91), GDP per capita<br>(0.04), and GDP per employed worker (0.07), terms of trade [0.33,<br>1.04], net foreign assets [0.28, 0.47].|
|Cui (2013)|China|1997:M1–2012:M12|<br>relative prices of nontradables to tradables measured as CPI-to-PPI (-<br>1.14), terms of trade (0.39), openness (6.76), reserves as % of GDP<br>(insig.), FDI as % of GDP (41.3).|
|Gan et al (2013)|China|1999:Q1–2007:Q4|<br>productivity (0.51), terms of trade (not signif.), trade openness (-0.41),<br>government expenditure (0.75), money supply M2 (-0.97).|
|Tashu (2015)|Peru|1992:Q1–2013:Q1|<br>relative labor productivity (0.36), real price of export commodities<br>(0.03), net foreign liabilities as % of trade (-0.06), primary current public<br>sector consumption as % of GDP (0.37), profit repatriation (-0.16), net<br>international reserves as % of GDP as proxy for forex intervention (-<br>0.56).|

Note: A positive (negative) coefficient denotes REER appreciation (depreciation) pressure.

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