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Mukhtar M. Metwally: Towards Abolishing the Rate of Interest in Contemporary Islamic Societies, Comment مختار متولي: نحو إلغاء معدلات الاهتمام في المجتمعات الإسلامية المعاصرة - تعليق: علي ضراط

Author

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  • ALI F. DARRAT

    (Department of Economics and Finance, Louisiana Tech University, Ruston, LA)

Abstract

Many researchers have expended enormous and welcome efforts attempting to examine the role that interest rates play in contemporary Muslim economies. In a stimulating recent study, Metwally (1990) contributed to this important inquiry by econometrically testing money demand (and investment) functions for several Muslim countries( ). His regressions suggest that the demand for money (however defined) in these Muslim economies is not determined by the rate of interest (the discount rate). He profoundly concluded that although current laws in Muslim countries do not prohibit interest-based transactions, most Muslims in these countries willingly adhere to the Islamic prohibition of interest. Of course, such a critical inference of Metwally's study is primarily based on his empirical finding that interest rates (as measured by the discount rate) proved statistically insignificant in the estimated equations. --

Suggested Citation

  • Ali F. Darrat, 1993. "Mukhtar M. Metwally: Towards Abolishing the Rate of Interest in Contemporary Islamic Societies, Comment مختار متولي: نحو إلغاء معدلات الاهتمام في المجتمعات الإسلامية المعاصرة - تعليق: علي ضراط," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 5(1), pages 39-49, January.
    • Handle: RePEc:abd:kauiea:v:5:y:1993:i:1:no:3:p:39-49
    DOI: 10.4197/islec.5-1.3
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    References listed on IDEAS

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    1. Barnhart, Scott W. & Darrat, Ali F., 1992. "The effects of monetary targeting on business activity and financial market stability in the United Kingdom," Journal of Banking & Finance, Elsevier, vol. 16(3), pages 523-543, June.
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