This study examines the impact of natural disasters on affected countries’ accessibility to international financial resources. We find empirical evidence that natural disasters significantly downgrade the sovereign credit rating of an affected country, an indicator of international financial accessibility. This finding is robust in developing countries, implying that they are faced with additional difficulties in financing post-disaster recovery costs compared with developed countries. Among disasters, droughts and storms display a particularly significant downgrading effect. Further results show that foreign aid from the international community helps to improve the accessibility, implying a possible acceleration of the post-disaster recovery in recipient countries.

This study empirically evaluates whether Korea's recent macroprudential measures have been effective either in reducing the volume of debt inflows or in altering their composition. Since 2010 Korea sequentially imposed three measures to provide financial market stability: limits on foreign exchange forward positions, the revival of a tax on foreign bond holdings, and a macroprudential levy. Overall, we find that these measures reduced the volume of debt inflows related to debt securities and short-term loans. The results remain constant over the entire sample period, although our findings are results with short-term data sample until December 2012.

The term “original sin” refers to countries that cannot take out foreign loans that are denominated in its own currency. This study investigates how capital account liberalization affects capital flow volatility in countries with and without original sin. Overall, we find that the level of capital openness increases capital flow volatility, and that countries with original sin experience additional volatility in their capital flows. When the data sample is limited to countries with high institutional quality, the difference remains between the two groups—confirming that the different effects of capital openness on volatility should be attributed to differences in the international status of currencies rather than in institutional quality. Emerging economies whose currencies are not internationalized should therefore be more cautious of capital account liberalization.