Chalongphob Sussangkarn: Two quotes from the paper seem to provide its motivation:

  1. “Exchange rate volatility has been at the center of several financial crises, which continues to derail sustainable economic growth, perpetrate economic declines, and concurrently also precipitates financial instability.”

  2. “The aim of this paper is to provide one new idea, namely, relative volatility as a suitable measure of instability of a phenomenon and apply it as an appropriate measure to track a target currency's instability from that in developed and emerging economies to learn some lessons for currency management policy.”

The view seems to be that exchange rate (FX) volatilities equate to instabilities, which may even lead to crises, so it is important to measure and track the volatilities of currencies. The paper develops the idea of “relative volatility” and applies...

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