nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒10‒26
eleven papers chosen by
Mohamed Mohamed Tolba Said

  1. Islamic Monetary Economics: Insights from the Literature By Uddin, Md Akther
  2. What drives the European islamic market: is it the conventional market or the other islamic markets ? By Touati, Fatima; Masih, Mansur
  3. Can GDP Growth Linked Instrument Be Used For Islamic Monetary Policy? By Uddin, Md Akther; Ali, Md Hakim; Radwan, Maha
  4. Granger-causal relationship between islamic stock markets and oil prices: a case study of Malaysia By Musaeva, Gulzhan; Masih, Mansur
  5. Efficient Markets Hypothesis in Canada:‎ a comparative study between Islamic and Conventional stock markets ‎ By neifar, malika
  6. Human Development and Muslim Countries: Need fulfillment versus basic universal income from Islamic perspective* By Hasan, Zubair
  7. Most Fatal Pandemic COVID-19 Outbreak: An Analysis of Economic Consequences By Mohajan, Haradhan
  8. Efficiency-Market Hypothesis: case of Tunisian and 6 ‎Asian stock markets ‎ By neifar, malika
  9. Development of proposals for improving personnel work in the civil service, carried out using a unified information system By Lavrova, Tatiana (Лаврова, Татьяна); Polyakova, Alexandra (Полякова, Александра); Antipov, Igor (Антипов, Игорь); Krasivskaya, Lyudmila (Красивская, Людмила)
  10. What skills do employers seek in graduates?: Using online job posting data to support policy and practice in higher education By Nora Brüning; Patricia Mangeol
  11. The New Economics and Regulation of Digital Platforms: Lessons from the Old World of Regulation? By Dasgupta, Kalyan; Williams, Mark

  1. By: Uddin, Md Akther
    Abstract: This chapter reviews critical early literature of Islamic monetary economics. The prohibition of Riba has imposed challenges on Islamic economists to come up with the viable alternatives to achieve Islamic monetary policy goals. Our extensive review of theoretical and empirical literature indicates that equity based profit- and loss-sharing instruments have been proposed for conducting open market operations in an interest-free economy. Theoretically, the central bank can achieve desired goals by controlling money supply and profit-sharing ratios. The findings from empirical literature suggest that money demand tend to be more stable in an interest-free economy. Whether monetary transmission works through Islamic banking channel is controversial, but the literature is growing. These findings are not surprising as majority Muslim countries lack sustainable and equitable economic growth. Moreover, these countries suffer from higher inflation and unemployment with little or no monetary freedom due to fixed exchange rate regime, shallow financial markets and strict capital control.
    Keywords: Islamic monetary policy, interest-free economy, monetary policy instruments
    JEL: E42 E52 E58
    Date: 2019
  2. By: Touati, Fatima; Masih, Mansur
    Abstract: The objective of this research is to identify the influences between Islamic index in Europe, and its counterpart in Asia, whether the requirement of Shariah (Islamic) compliance of Islamic indexes will tend to get the indexes closer by being influential on each other, or other indexes such as, the conventional regional index and/or conventional interest rate such as LIBOR, will have more influence on the European Islamic index. To answer this question, we applied our study to the following indexes, European Islamic, Asian Islamic, Europe conventional, US conventional, and LIBOR. The standard time series techniques have been employed for the analysis. Our findings tend to indicate that European Islamic index will be influenced more by the movements in LIBOR and conventional markets, rather than the other Islamic indexes. For the policy makers and investors, our results are useful to predict movements of European Islamic index.
    Keywords: European Islamic market, conventional market, LIBOR
    JEL: C22 C58 G15
    Date: 2018–11–18
  3. By: Uddin, Md Akther; Ali, Md Hakim; Radwan, Maha
    Abstract: In this paper, we investigate Islamic monetary policy and proposes an alternative monetary policy instrument, namely gross domestic products (GDP) growth link instrument. The modeling techniques applied are ordinary least square (OLS) and the method is applied to a dataset of 99 countries for the year 2012 and time series data for Malaysia over the period of 1983-2013. Moreover, six months (January – June 2014) daily data on Islamic and conventional interbank rates are used for the correlational study. The results tend to show that GDP growth rate adjusted for interest income and inflation can be set as a benchmark for money market instruments and reference rate for financial and capital market to set the cost of capital or rate of return. Also, we found that real interest rate is mostly not representative across 99 countries as most of the time policy rates are either determined in the money market which is usually disintegrated with the real sector of an economy, or it is fixed by the Central Bank. Islamic and conventional money market rates are found significantly correlated in the presence of dual banking system. Moreover, inflation and employment rate in the Organisation of Islamic Cooperation (OIC) countries are found higher than non-OIC countries. Therefore, the interest rate should be replaced with more representative policy rate like the GDP growth rate linked instrument which could provide a benchmark rate for pricing products in Islamic commercial banking, and an avenue for investment in the Islamic financial market.
    Keywords: Real Economy, Islamic Monetary Policy, Real Interest Rate, GDP Growth Rate, Inflation, Real Exchange Rate, Gross Savings
    JEL: E42 E52 E58
    Date: 2019–08–29
  4. By: Musaeva, Gulzhan; Masih, Mansur
    Abstract: The connection between oil price fluctuations and stock markets has gained much attention in the recent decades due to the critical importance of global oil prices. This paper aims to study the Granger-causal relationship between real prices of the Islamic stock market and real oil prices – a novel study, to the best of our knowledge. Malaysia is chosen as a case study. Using the standard time series techniques, we have discovered that Islamic stock prices and oil prices are both more or less independently leading; that is, neither of them drives the other to a large extent. These results are explained in part by Malaysia’s prevaling oil price subsidies. We thus conclude that, in all similar scenarios, investors should not use real oil price changes as a predictor of subsequent changes in the Islamic stock market, seeing that the latter seems to be strongly resilient to oil price fluctuations. The policymakers, in turn, could experiment by monitoring Islamic stock prices more closely to gauge the performance of the economy, in order to take any further action (if necessary) for affecting economic variables (through either stabilization or supply-side policies).
    Keywords: Islamic stock market, oil prices, Granger causality, Malaysia
    JEL: C22 C58 G15
    Date: 2018–10–31
  5. By: neifar, malika
    Abstract: In this paper we test the weak form of the Efficient-Market Hypothesis (EMH) using monthly ‎data from 2004M08 to 2018M04 of stock prices by using linear and nonlinear (KSS 3 type, ‎Sollis and Kruse) unit root tests. The informational market efficiency is examined in the ‎Islamic and conventional markets in Canada. It aims to investigate whether Islamic market ‎would be more or less efficient than the conventional one. Findings indicate that both ‎Conventional Canadian Stock Index (CCSI) and Dow Jones Islamic Canadian Price Index ‎‎(DJICPI) show characteristics of random walk indicating that the stock markets are efficient. ‎The major policy implications is that in this country (Canada), fund managers and investors ‎cannot enjoy excess returns to their investment. ‎
    Keywords: Dow Jones Islamic Market (DJIM); Conventional Canadian Stock Index, Efficient-Market ‎Hypothesis (EMH), linear and nonlinear unit root tests, KSS, Sollis, CHLL‎
    JEL: C12 C22 G10 G14 G15
    Date: 2020–09–28
  6. By: Hasan, Zubair
    Abstract: Human beings are the most important source of economic progress as well as end users of its fruits. The performance of both the sectors – public and private – is a function of workers’ efficiency – moral and professional. The moral dimension is internal to human beings. It is difficult to measure and separate from the professional. The objective criteria in material terms, as opposed to spiritual, emphasize the reduction of income inequalities and eradication of poverty. But it misses a vital causative ingredient - inequality of access to knowledge and information which is essentially systemic and structural in modern social orders. In mundane measures for promoting equality, the concern for meeting the basic needs of the masses – food, clothing, shelter, education and health care – has long remained on the scene. With the turn of the century, however, need fulfillment seems losing ground to the guaranteeing of a universal minimum income to each national ensuring a reasonably decent living. This paper looks at the two alternatives from an Islamic perspective. It supports in conclusion need fulfillment as a better measure to universal income for ameliorating the fate of the poor.
    Keywords: Human development, Basic needs, Universal basic income, Islamic perspective.
    JEL: I23 I25 I28
    Date: 2020–01
  7. By: Mohajan, Haradhan
    Abstract: The novel (new) coronavirus (CoV) fatal disease (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-COV- 2 or 2019-nCoV). It has been identified as the causative agent of the viral pneumonia outbreak in Wuhan, China, at the end of 2019. At present it becomes great global public health concern and as well as global economic depression. The International Monetary Fund (IMF) estimates that due to COVID-19 outbreak cost the world economy up to $9 trillion. After COVID-19 outbreak, home quarantines, lockdown, widespread restrictions on labor mobility and travel, border closings and closing of economic activities affect global supply chains, oil prices, travel and tourism, restaurants, conferences, sporting events, government budget, etc. The amount of the global economic damage is very uncertain at present, but it is estimated that it will be large depending on the length of COVID-19. The paper discusses the social, economic, and health impacts on the world’s poorest countries. The purpose of this study is to examine the economic impacts due to COVID-19 pandemic outbreak. An attempt has been taken here to discuss the current economic situation of the world and analyses the potential consequences on global economy in future.
    Keywords: SARS-CoV-2, COVID-19 outbreak, pandemic, lockdown, economic consequences
    JEL: I15
    Date: 2020–03–10
  8. By: neifar, malika
    Abstract: In this paper we test the weak form of the Efficient-Market Hypothesis (EMH) using monthly ‎data of stock prices for the period from 2010M01 to 2019M07 for seven markets (Tunindex) ‎in Tunisia and 6 Asian countries : Saudi Arabia (TSAI), Japon (Nikkei 225), China (SSEC), ‎Turkey (BIST100), India (BSE30), and Indonesia (JKSE) by using linear and nonlinear (KSS ‎and Modified KSS) unit root tests. Our empirical results indicate that the stock markets are ‎efficient [not efficient] in the weak form of EMH in Tunisia and Saudi Arabia [Japan, ‎Turkey, India, Indonesia, and China]. The major policy implications is that in these five ‎countries (Japan, Turkey, India, Indonesia, and China), fund managers and investors can ‎enjoy excess returns to their investment. ‎
    Keywords: Efficient-Market Hypothesis (EMH); BDS test; Linear Unit root test; Nonlinear Unit root test, ‎Tunisia and 6 Asian countries
    JEL: C12 C22 G10 G14
    Date: 2020–09–30
  9. By: Lavrova, Tatiana (Лаврова, Татьяна) (The Russian Presidential Academy of National Economy and Public Administration); Polyakova, Alexandra (Полякова, Александра) (The Russian Presidential Academy of National Economy and Public Administration); Antipov, Igor (Антипов, Игорь) (The Russian Presidential Academy of National Economy and Public Administration); Krasivskaya, Lyudmila (Красивская, Людмила) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Research and existing practice show that there is a need to increase the professionalism of civil servants, who are the central link in the civil service, and to master new competencies. Due to the fact that the main tool of personnel management is the FSIS "Unified information system for managing the personnel of the state civil service of the Russian Federation" (FSIS "UISU KS"), the current model of personnel work with new volumes of information in the civil service was assessed and promising directions of personnel work on the basis of FGIS "UISU KS". The study is based on both theoretical developments and practice-oriented ones, based on the results of the implementation at the RANEPA under the President of the Russian Federation on the basis of the Higher School of Economics of the project of methodological support for the work of personnel departments in the FSIS "UISU KS".
    Date: 2020–05
  10. By: Nora Brüning (OECD); Patricia Mangeol (OECD)
    Abstract: Employers increasingly reach job seekers through online job postings, particularly for jobs requiring a higher education qualification. Job postings available online provide a rich source of real-time and detailed data on the qualifications and skills sought by employers across industries, occupations and locations. Using a sample of over 9 million job postings in four US states (Ohio, Texas, Virginia and Washington), this paper explores three questions. How does employer demand for graduate skills vary geographically, within and among occupations? For graduates in a general study field without a dedicated career vocational pathway, like sociology, what occupational clusters show evidence of employer demand, and what skills are sought? Given the high demand in the field of information and communications technology (ICT), are employers looking for ICT specialists open to hiring graduates from study fields other than ICT?We find evidence of variation in occupational demand, and to some extent in skill demand, within occupational clusters across the four states. We identify three occupational clusters where sociology graduates are in most demand, with distinct skill profiles. We also find that, when filling ICT positions, a notable share of employers considers recruiting graduates from other fields of study while requiring those graduates have the right technical transferable skills.Job posting data, we conclude, hold promise to complement existing labour market information systems and aid educators and policy makers in aligning labour demand and educational offerings. If analysed and disseminated effectively, such data could also assist students and workers in making learning and career decisions, for instance by identifying opportunities to build their own non-traditional path into high-demand, high-paying ICT occupations.
    Date: 2020–10–13
  11. By: Dasgupta, Kalyan; Williams, Mark
    Abstract: This paper casts the economic and regulatory debate around digital platforms in a broader and more historical context. We emphasise that despite the considerable theoretical and policy-making discussion that focuses on the specific attributes of platforms-the presence of indirect network effects, economies of scale and difficulties of consumer coordination-that the challenge confronting policy-makers is an inherent tension between the desire to see "competitive" markets characterised by entry or by multiple competing firms, and other economic objectives such as efficiency and incentives to innovate. We note that similar challenges have been confronted in areas such as innovation policy and in network industries where sunk set-up costs and the resulting scale economies potentially limit the scope for efficient entry. Recent work by Weyl and White (2014; 2016) in fact emphasises the similarities between digital platforms and natural monopolies, and argues that even though unregulated platforms will not provide the socially optimal level and quality of service, any distortions created by platforms' profit-maximising behaviour are not efficiently corrected by introducing more competition. They argue that such competition is likely to inefficiently fragment platforms and reduce the level of network effects that they deliver to consumers, and propose that a natural monopoly philosophy of regulation may be more appropriate. In this paper, we focus on the historic experience of the telecommunications industry and its regulators in attempting to balance the desire to introduce competition with the natural constraints posed by the production technologies used in the industry. Telecom regulation has, at various times, had a "marketmitigating" character and at other times has had a "market-shaping" character. The former type of regulation is familiar natural monopoly regulation, which attempts to protect consumers against the consequences of a concentrated market structure, while recognising or accepting that the market structure may be difficult to change and may even have efficiency benefits. The latter type of regulation has involved regulatory efforts to affect market structure through tools such as wholesale access regulation justified by reference to "stepping stone" or "ladder of investment" theories, or vertical unbundling of incumbents. Examining the regulatory history of the US and UK we find that marketshaping intervention has had limited success in creating new entry, and that in both countries, the most important long-term driver of competition appears to be competition from new technologies, e.g., cable and mobile networks in the past and new fibre-based entrants in the present. The experience of telecoms regulation-which we plan to expand to include the experience of additional jurisdictions besides the US and the UK-suggests that the production technology of an industry remains a powerful determinant of market structure. In the case of platform industries, network effects and scale economies may limit the extent of competition in the efficient delivery of platform services. If the experience of telecoms is anything to go by, efforts to engineer more competition in the primary platform market may encounter a high chance of failure or irrelevance in the face of underlying economic forces and technological progress. There may be merit in exploring a regulatory approach that attempts to mitigate market failures that result from concentrated market structures, as proposed by Weyl and White, and competition policy may play an important role in preventing the leveraging of market power from primary platform markets to adjacent services markets. However, policies aimed at increasing direct competition to existing digital platforms may encounter difficulties similar to those encountered by market-shaping policies in telecoms regulation.
    Date: 2020

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