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Climate finance is regularly not only seen as a tool to efficiently combat global warming but also to solve development problems in the recipient countries and to support the attainment of sustainable development goals. Thereby, conflicts between distributive and allocative objectives arise, which threaten the overall performance of such transfer schemes. Given the severity of the climate change problem, this study aims to raise concerns about whether the world can afford climate transfer schemes that do not focus on prevention of (and adaptation to) climate change but might be considered as a vehicle of rent-seeking by many agents.

Future designs of international transfer schemes within the framework of the Paris Agreement are to be based on experience gained from existing mechanisms. Therefore, the authors examine different existing schemes using a graphical technique first proposed by David Pearce and describe the conflicts between allocative and distributional goals that arise.

In line with the famous Tinbergen rule, the authors argue that other sustainability problems and issues of global fairness should not be primarily addressed by climate finance but should be mainly tackled by other means.

As there is still ongoing, intense discussion about how the international transfer schemes addressed in Article 6 of the Paris Agreement should be designed, the research will help to sort some of the key arguments.

There are prominent international documents (like the Paris Agreement and the UN 2030 Agenda for Sustainable Development) seeking to address different goals simultaneously. While synergies between policies is desirable, there are major challenges for policy coordination. Addressing several different goals using fewer policy instruments, for example, will not succeed as the Tinbergen Rule points out.

The integration of co-benefits in the analysis allows for taking into account the social effects of climate policy. As the authors argue, climate finance approaches could become overstrained if policymakers would consider them as tools to also solve local sustainability problems.

In this paper, the authors will not only examine what can be learnt from the clean development mechanism (CDM) for future schemes under Article 6 of the Paris Agreement but also observe the experiences gained from a non-CDM scheme. So the authors pay attention to the Trust Fund of the Global Environment Facility (GEF) which was established with global benefit orientation, i.e. – unlike the CDM – it was not regarded as an additional goal to support local sustainable development. Yet, despite its disregard of local co-benefits, the authors think that it is of particular importance to include the GEF in the analysis, as some important lessons can be learnt from it.

The global financial crisis demonstrated that monetary policy alone cannot ensure both price and financial stability. According to the Tinbergen (1952) rule, there was a gap in the policymakers’ toolkit for safeguarding financial stability, as the number of available policy instruments was insufficient relative to the number of policy objectives. That gap is now being closed through the creation of new macroprudential policy instruments. Both monetary policy and macroprudential policy have the capacity to influence both price and financial stability objectives. This paper develops a framework for determining how best to assign instruments to objectives.

Using a simplified New-Keynesian model, the authors examine two sets of policy trade-offs, the first concerning the relative effectiveness of monetary and macroprudential policy instruments in achieving price and financial stability objectives and the second concerning trade-offs between macroprudential policy instruments themselves.

This model shows that regardless of whether the objective is to enhance financial system resilience or to moderate the financial cycle, macroprudential policies are more effective than monetary policy. Likewise, monetary policy is more effective than macroprudential policy in achieving price stability. According to the Mundell (1962) principle of effective market classification, this implies that macroprudential policy instruments should be paired with financial stability objectives, and monetary policy instruments should be paired with the price stability objective. The authors also find a trade-off between the two sets of macroprudential policy instruments, which indicates that failure to moderate the financial cycle would require greater financial system resilience.

The main contribution of the paper is to establish – with the help of a model framework – the relative effectiveness of monetary and macroprudential policies in achieving price and financial stability objectives. By so doing, it provides a rationale for macroprudential policy and it shows how macroprudential policy can unburden monetary policy in leaning against the wind of financial imbalances.

Present‐day economics is characterised by the fragmentary and reductionist approach that typifies most social sciences. Economists generally fail to recognise that the economy is merely one aspect of a whole ecological and social fabric; a living system composed of human beings in continual interaction with one another and with their natural resources, most of which are, in turn, living organisms. The basic error of the social sciences is to divide this fabric in fragments, assumed to be independent and to be dealt with in separate academic departments (Capra, 1982, pp. 194–5).

This chapter attempts to analyze mainly the interactions between the implementation of inflation targeting (IT) policy and performance in the conduct of economic policies (fiscal and exchange rate) in emerging countries. More precisely, empirical studies conducted in this chapter aim to apprehend the feedback effect of this strategy of monetary policy on the budget deficit and volatility of exchange rate performance. This said, we consider the institutional framework as endogenous to IT and analyze the response of authorities to the adoption of this monetary regime. To do this, the retained methodological path in this chapter is an empirical way, based on the econometrics of panel data. First, our contribution to the existing literature is to evaluate the time-varying treatment effect of IT’s adoption on the budget deficit of emerging inflation targeters, using the propensity score matching approach. Our empirical analysis, conducted on a sample of 34 economies (13 IT and 21 non-IT economies) for the period from 1990 to 2010, show a significant impact of IT on the reduction of budget deficit in emerging countries having adopted this monetary policy framework. Therefore, we can say that the emerging government can benefit ex post and gradually from a decline in their public deficits. Retaining the same econometric approach and sample, we tried secondly to empirically examine whether the adoption of IT in emerging inflation targeters has been effectively translated by an increase in the nominal effective exchange rate volatility compared to non-IT countries. Our results show that this effect is decreasing and that this volatility is becoming less important after the shift to this monetary regime. We might suggest that this indirect and occasional intervention in the foreign exchange market can be made by fear of inflation rather than by fear of floating hence in most emerging countries that have adopted the IT strategy. Finally, we can say that our conclusions corroborate the literature of disciplining effects of IT regime on fiscal policy performance as well as the two controversial effects of IT on the nominal effective exchange rate volatility.

John Dunning introduced the OLI (Ownership‐Location‐Internalization) paradigm 37 years ago to explain the origin, level, pattern, and growth of MNEs’ offshore activities. Over the years, OLI has developed into perhaps the dominant paradigm in international business (IB) studies. However, the costs of being a paradigm are reflected in Dunning’s efforts to include an ever‐expanding array of IB theories and phenomena under the OLI “big tent.” In this paper, we focus specifically on the O in the OLI paradigm, tracing the history of Dunning’s ownership advantages. We argue that the modifications of O advantages over the past 37 years, as Dunning attempted to bring all IB phenomena and IB‐related theories under the OLI “big tent,” has had mixed results. However, we continue to believe that the typology of ownership advantages retains its relevance for IB scholars; that O advantages cannot and should not be subsumed within internalization advantages; and that O advantages are necessary for explaining the existence and success of the MNE as an organizational form

This paper aims to examine the response of monetary policy to financial instability in the West African Economic and Monetary Union.

Through annual aggregated data from 1970 to 2019, the empirical strategy is based on the Markov regime-switching model with fixed probabilities.

The results revealed that the monetary policy of the central bank of the West African Economic and Monetary Union is characterized by two regimes (calm and distress) with respect to the trend of financial stability. The authors also found that the occurrence of the calm regime was likely greater than that of the distress regime. In addition, the calm regime is longer than the distress regime. The authors finally revealed that the central bank reacts to financial instability risk by increasing its short-term interest rate when financial instability reaches a threshold.

The limitation of this study is the unavailability of monthly or quarterly data that are more suitable for the methodological approach adopted.

This study is the one to estimate the response of the Central Bank of West African Countries to financial stress using a novel approach based on the Markov-Switching regression.