nep-isf New Economics Papers
on Islamic Finance
Issue of 2023‒05‒15
five papers chosen by
Ali Polat, Ankara Yıldırım Beyazıt Üniversitesi

  1. The interpretive and relational work of financial innovation: A resemblance of assurance in Islamic finance By Pitluck, Aaron Z.
  2. Is Islamic Finance A Panacea for Global Economic Disruptions After COVID-19 By Abubakar, Jamila; Bashayer AlQashouti, Bashayer AlQashouti; Aysan, Ahmet Faruk; Unal, Ibrahim Musa
  3. Monetary Policy Implications of Central Bank Digital Currencies: Perspectives on Jurisdictions with Conventional and Islamic Banking Systems By Ms. Inutu Lukonga
  4. Halal tourism in social science discipline: A literature review By Rahmat, Al Fauzi
  5. Zakat, Non-State Welfare Provision and Redistribution in Times of Crisis: Evidence from the Covid-19 Pandemic By Gallien, Max; Javed, Umair; van den Boogaard, Vanessa

  1. By: Pitluck, Aaron Z. (Illinois State University)
    Abstract: What social forces shape the trajectory of novel, moralized forms of finance such as social finance, green finance, or Islamic banking and finance? More broadly, how do agents mobilize arguments and organize each other to create any form of financial innovation? This article addresses both questions by contributing an ethnography of a novel financial innovation pseudonymously named Sukuk Illumination, an internationally traded moral alternative to a corporate bond. This article’s findings both elaborate and subsume existing functionalist and critical explanations of financial innovation. The central argument is that we can better understand what causes financial innovation and the trajectory that new innovations take when we conceptualize each financial instrument as a polysemic cultural object materialized in legal contracts and institutionalized work practices and created by parties with asymmetric power to define the new object. Financial innovation necessarily involves multiple parties in a financial service commodity chain with multivalent motivations co-producing and hotly debating interpretations of the prospective financial instrument while simultaneously creating, refashioning, and differentiating existing relationships with one another. Sukuk Illumination demonstrates both the potential and constraints for creating new moralized financial instruments and for transforming financial systems.
    Date: 2023–04–12
  2. By: Abubakar, Jamila; Bashayer AlQashouti, Bashayer AlQashouti; Aysan, Ahmet Faruk; Unal, Ibrahim Musa
    Abstract: The coronavirus pandemic has led to unprecedented financial and economic disruptions worldwide. Academic interest in the topic of COVID-19 outbreak has led to a rapid influx of publications on the subject matter from both Islamic and conventional finance and economy perspectives. This paper analyses the contributions of Islamic finance and economy (IFE) literature to the global discussion through a bibliometric analysis and literature review of publications on IFE and COVID-19 using the dimensions database. The paper investigates the role IFE research has played in providing solutions capable of addressing global challenges in the wake of the pandemic. The paper reveals that IFE has made efforts during the pandemic to mitigate the effect of the crisis and strengthen economies. But unlike after the 2008 global financial crisis, IFE is not focusing on global solutions and is more confined to localized country-specific solutions for recovery and resilience. The paper recommends repositioning IFE's academic focus towards tackling issues and providing solutions at a global scale.
    Keywords: Resilience, Islamic Finance and Economy, COVID-19, Economic Recovery
    JEL: G00 G01 G20 G21
    Date: 2022–09–05
  3. By: Ms. Inutu Lukonga
    Abstract: Central bank digital currencies (CBDCs) promise many benefits but, if not well designed, they could have undesired consequences, including for monetary policy. Issuing an unremunerated CBDC or a wholesale CBDC does not change the objectives of monetary policy or the operational framework for monetary policy. CBDCs can, however, induce changes in the retail, wholesale and cross border payments that have negative spillover effects on monetary policy, through their effects on money velocity, bank deposit disintermediation, volatility of bank reserves, currency substitution, and capital flows. Countries most vulnerable are those with banking systems dominated by small retail deposits and demand deposits, low levels of digital payments and weak macro fundamentals. Proposed CBDC design features, such as caps on CBDC holdings and unremunerating the CBDC can moderate disintermediation risks, but they are not sufficient. Central banks will need to ensure that unintended macroeconomic risks are comprehensively identified and mitigated.
    Keywords: Central Bank Digital Currencies; CBDC; CBDC Pilots; Monetary Policy; Islamic Finance; impact monetary policy implementation; design option; unremunerated CBDC; monetary policy implication; deposit disintermediation; Commercial banks; Velocity of money; Islamic banking; Monetary base; Global
    Date: 2023–03–17
  4. By: Rahmat, Al Fauzi
    Abstract: Halal tourism is a new segment in tourism studies that have received attention and has now proliferated. Past studies have not been so deep in treading global scientific literature on halal tourism studies on tracking its evolution and trends among scientific journal which focuses on social science discipline. Therefore, this article is based on a systematic literature review analysis of halal tourism in social science discipline as an effort to improve our understanding of previous halal tourism studies. Data were obtained from the academic database Scopus, 31 articles were obtained about halal tourism in social science discipline, and the data period was collected from the beginning to the end of 2020. The data is illustrated using two applications, namely NVIVO and VOSViewer, as the primary tools for analyze qualitative data, which selected; (VOSViewer; Keyword Co-occurrence Network Maps and Trend (KCNM/T)), (NVIVO; Hierarchy Chart (HC), word frequencies (WF), and Explore Diagram Analysis (EDA)). The results showed that, from 31 journals, Stephenson (2014) has the most influence with high cited, besides, Tourism Management as a journal name that identified many articles published there, and Routledge as a publisher with a high total journal on Halal Tourism, and Indonesia as a country that high mention time. Specifically, various approaches and distributions based on methodology, objectives, and geography were the research's focus. Recent trends and the dominant frequency of words from the study of halal tourism have shown several scholars' high interest. In the halal tourism studies on social sciences discipline, previous scholars have carried out many different research segments, namely, tourism issues, product issues, destination issues, travel issues, service issues, and market issues. Future research is also considered in this article.
    Date: 2021–10–31
  5. By: Gallien, Max; Javed, Umair; van den Boogaard, Vanessa
    Abstract: Around the world, pandemic relief efforts saw renewed attention to state social protection and its limitations. Less attention has been paid to alternative forms of welfare provision, including zakat in Muslim countries. We ask how states and citizens engage with zakat during a crisis through a case study of the Covid-19 pandemic in Pakistan, Egypt and Morocco, drawing on novel and nationally representative survey data from 5, 484 respondents. While we might expect citizens to be less motivated to pay zakat at times of personal economic hardship, we find that a large majority of the general population and of zakat contributors perceive zakat as particularly important in the Covid context, and were also more likely to make other charitable contributions. We argue that zakat may play an important role in supplementing state social protection and redistribution in times of crisis. While we find evidence for zakat’s redistributive nature, the diversity of practice and common reliance on social relations need to be considered when looking at its redistributive impact and function in times of crisis
    Keywords: Finance, Health,
    Date: 2023

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