nep-isf New Economics Papers
on Islamic Finance
Issue of 2018‒05‒07
three papers chosen by
Halimatun Aris

  1. The Preeminence of Gold and Silver as Money By Krichene, Noureddine; Ghassan, Hassan B.
  2. An old wine in new shari'a compliant bottles? A time-frequency wavelet analysis of the efficiency of monetary policy in dual financial systems By Amine Ben Amar
  3. Modelling the Goals and Features of an Ideal Islamic City for use in Future Conformance Analyses of Contemporary Urban Forms and Planning By Deborah Laura Isaacs; Ali Parsa; Seow Eng Ong

  1. By: Krichene, Noureddine; Ghassan, Hassan B.
    Abstract: Historically, money is gold and silver, supplied by the market on profit criterion. Everywhere, government inconvertible paper money arose from bankruptcy. A government with balanced budgets would never need it. Imposed by force, inconvertible paper is a taxation mean, highly inflationary, and causes impoverishment. Unjust and bankrupt governments will continue to force this despotic money. Islamic Monetary Economics refutes the idea of money as a policy tool. Fully convertible paper is Shariah compliant. Shariah requires a just government to balance its budgets and restore fully gold and silver as lawful money.
    Keywords: Money, Gold-silver, Inconvertible paper, Inflation, Bankruptcy, Shariah.
    JEL: E42 E5 F33
    Date: 2017
  2. By: Amine Ben Amar (Leda-Sdfi - Université Paris Dauphine (Paris 9))
    Abstract: Understanding the interrelationships between Islamic and conventional banks in dual financial systems is crucial for monetary policy decision makers. Using the wavelet coherence approach, this paper empirically investigates the dependency between the LIBOR and an Islamic benchmark rate, namely the IIBR (Islamic Interbank Benchmark Rate). This approach allows us to study the dynamics of the relationship between the LIBOR and the IIBR in the time-frequency space, then, to analyze to which extent Islamic financial institutions react to interest rate and, finally, to conclude whether the presence of Islamic banks enhance (or not) the efficiency of monetary policy. The result suggests not only that Islamic and conventional banks are alike, in terms of their business model, but also that Islamic banks react to changes in interest rates with some delay, which may affect the effectiveness of the monetary policy transmission mechanism.
    Keywords: Islamic banks,conventional banks,IIBR,LIBOR,wavelet coherence
    Date: 2018
  3. By: Deborah Laura Isaacs; Ali Parsa; Seow Eng Ong
    Abstract: The role for and of Islam in urban planning is typically overlooked or misperceived, with the question of how ‘Islamic’ contemporary Muslim cities are not addressed. Despite numerous works on Muslim city planning and characteristics, these have not provided a simplified model of Islamic goals and features which can be utilised for general testing and comparison. In this study, such a model is constructed using the Qur’an, Sunnah, and sources detailing planning and administration of cities in the Caliphate from 622 AD to roughly 650 AD. Eight major objectives are linked to 21 observable features, which can be used to measure conformance of a subject city with the theoretical ideal based on Shari’ah. The measured conformance differences can also be used to compare modern cities across time and with each other. This allows clearer identification of contextual factors responsible, and can depict the fluctuating influence of Islamic objectives. The constructed model additionally exhibits Islam’s compatibility with and relevance to modern urban planning paradigms, including economic and environmental sustainability and social cohesion. Adaptation and application of Islamic planning objectives in contemporary cities can then rationally be utilised to ameliorate current shortcomings, improving urban conditions for Muslim and other communities.
    Keywords: Islamic city; testing model; Urban Form; Urban Planning
    JEL: R3
    Date: 2017–07–01

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