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on Islamic Finance |
| By: | Umam Khoirul (UNIDA Gontor - University of Darussalam Gontor); Muhammad Atha Mahdi (UNIDA Gontor - University of Darussalam Gontor); Alfarid Fedro (UNIDA Gontor - Univerisity of Darussalam Gontor) |
| Abstract: | The global crisis and the COVID-19 pandemic have intensified the debate surrounding Modern Monetary Theory (MMT), particularly as nations resort to budget deficits. MMT economists argue that the central government, not constrained by fiscal limits, can maintain effective demand to achieve public goals like full employment and economic growth. However, economists remain skeptical about the permissiveness of MMT in generating new money. Extensive research is needed to explore the foundation of money supply and demand, examining if it truly achieves economic goals or leads to failure. Umer Chapra offers a profound monetary perspective, considering the demand and supply of money in the Islamic monetary system that aims for justice. This study aims to examine MMT's money demand and supply from Chapra's viewpoint, incorporating its economic goals. Employing a qualitative approach based on library research, this study finds that the endogenous MMT money demand model requires revision within Chapra's framework. To avoid misallocation and achieve economic objectives, the study suggests adopting Chapra's recommendations, such as eliminating bank interest in credit allocation and controlling unproductive and speculative money demand. This ensures that the MMT idea of endogenous money functions properly. However, further research is needed to address the techniques for avoiding money demand in the speculative sector, an area where Chapra's work lacks detail. Collaboration among Muslim economists can fill this gap and enrich the discussion. By bridging this gap, this study contributes to the ongoing discussion on monetary policy and provides valuable insights for policymakers and economists. |
| Keywords: | Modern Monetary Theory (MMT), Money Demand, Money Supply, Endogenous Money, Islamic Monetary System |
| Date: | 2023–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04160994&r=isf |
| By: | Nabil El Majdoub (FSJES - Faculté des Sciences Juridiques, Economique et Sociales de Mohammedia - UH2MC - Université Hassan II [Casablanca]) |
| Abstract: | Sukuk (Islamic bonds) emerged as a revolutionary financial instrument over the last years and is considered as the flagship capital market instrument of the Islamic finance industry. However, the understanding of it is still limited compared to conventional bonds. This study aims to investigate whether the announcements of Sukuk issuance that carry any new information can create impact on the market's reactions using 42 Sukuk announcements over the period of 2010 to 2019 in four Gulf financial markets. It is revealed the absenteeism of significant abnormal returns across asymmetric and symmetric event windows for periods before and after the announcement date, concluding no wealth effect. Within the equity marketplace, these results will be of practical relevance to corporations, practitioners and decision-makers. |
| Keywords: | Islamic finance, Sukuk, Event study, GCC |
| Date: | 2021–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04175214&r=isf |
| By: | triyawan, andi; latifah, hafizah |
| Abstract: | Sharia monetary instruments incorporate monetary control based on sharia principles to assist Bank Indonesia in developing and implementing monetary policy. That’s way, it is expected that sharia monetary policy will create economic stability in Indonesia, one of which is rupiah value stability or inflation control. The goal of this research was to look at the impact of sharia monetary instruments, specifically Sharia Bank Indonesia Certificates (SBIC), Bank Indonesia Sharia Deposit Facilities (BISDF), and Sharia Interbank Call Money (SICM), on Indonesian inflation from 2011 to 2020. This is a quantitative study that explains the relation between the independent and dependent variables. The inflation percentage is the dependent variable, whereas the number of SBIC, BISDF, and SICM is the independent variable. This study used time series data from 2011-2020. The Vector Autoregressive (VAR) or Vector Error Correction Model (VECM) method is used in the analysis. The VECM estimation results reveal that SBIC has no effect on inflation in the long or short term. In the meantime, the BISDF has a large favorable influence on inflation, but only in the short term. Finally, in the long term, SICM has a negative influence on inflation, although in the short term, SICM has no effect on inflation. Furthermore, according to the Granger causality test, only the SBIC and BISDF variables demonstrate bidirectional causality. Meanwhile, unidirectional causality exists between the BISDF and inflation, SBIC and SICM, so do BISDF and SICM. |
| Date: | 2023–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:wqynf&r=isf |