nep-isf New Economics Papers
on Islamic Finance
Issue of 2018‒06‒11
two papers chosen by
Halimatun Aris

  1. Toward A New Framework of Islamic Economic Analysis By Akhmad A. Susamto
  2. Inflation Dynamics in The Gambia By Cham, Tamsir

  1. By: Akhmad A. Susamto (Centre for Research in Islamic Economics and Business (PKEBS) and Department of Economics, Faculty of Economics and Business Universitas Gadjah Mada)
    Abstract: The effort to develop Islamic economics as a discipline has not brought about the expected results. Differing from previous diagnoses, in this paper, I argue that it is the absence of a clear notion of what economics can be considered to be Islamic that impedes the development of Islamic economics. Such a clear notion is essential. I therefore propose three main conditions under which an economics can be considered as (and henceforth to be given the prefix) Islamic. I further propose that the scope of Islamic economics consists of four distinguished fields of work, and that the methods used in the development of Islamic economics vary depending on the end sought within each field of work. I finally expand on three implications, which together give rise to a hope that the development of Islamic economics, and its body of knowledge, is likely to be much less complicated than Islamic economists have ever thought.
    Keywords: Islamic worldview; Islamic economics; Methodology of Islamic economics
    JEL: B49 B59
    Date: 2018–05
  2. By: Cham, Tamsir (The Islamic Research and Teaching Institute (IRTI))
    Abstract: Gambia inflation rate has picked-up in recent years. This paper investigates the inflation dynamics in The Gambia using monthly time series data for the period 2005-2014. Several econometrics models are applied including single equation model, Structural Vector Autoregression (SVAR) model and Vector Error Correction Model (VECM). The empirical results confirm the existence of stable relation between money supply and inflation, and exchange rate and inflation. We found that the depreciation of the exchange rate has a much more immediate impact on inflation. In addition, the exchange rate pass-through for GMD/ US dollar exchange rate is stronger. The study shows that current inflation is affected significantly by past inflation. The results also reveal that inflation in neighboring country, Senegal, significantly influences inflation in the Gambia in all specifications. Furthermore, the empirical findings reveal that the artificial fixing of the exchange rate or fear of float in recent years further exert inflation pressure. In the short-run external shocks of money supply, exchange rate and prices in Senegal account for significant variations of inflation. However, in the medium term domestic demand and the exchange rate pass-through for GMD/US dollar exchange rate account for larger variations in inflation.
    Keywords: Inflation; Money Supply; Exchange Rate
    JEL: C32 E31 E52
    Date: 2017–07–01

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