Currency risk driven by productivity growth, monetary policy differences, and export pricing.
The article explores how different types of economic shocks affect currency risk between two countries. They found that shocks to long-term productivity growth and monetary policy play a big role in currency risk. Differences in how countries save money and in their monetary policies can also impact currency risk. Export pricing doesn't have much effect on currency risk. Shocks to volatility in productivity growth are important for understanding changes in currency risk, but don't explain everything.