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An Evaluation of Research on Monetary Policy and Stability of the Islamic Economic system تقييم الأبحاث المتعلقة بالسياسة والاستقرار المالي لنظام الاقتصاد الإسلامي

Author

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  • Shamim Ahmad Siddiqui

    (Department of Economics University of Brunei Darussalam)

Abstract

One of the key manifestations of Islamization of the contemporary economies had been replacement of interest based banking by a profit and loss sharing banking. By the end of 1970s the concept of Islamic banking had become quite popular. However, it was felt that more rigorous analytical research was required to clearly understand the consequences of the new system on savings, investment, stability of the economy, and implications for monetary policy. This paper critically evaluates some of the important theoretical models developed in this area to address different apprehensions. It has been noted that although a number of questions related to the new system remained unanswered, research interest in this area declined as Islamic banking failed to use profit and loss sharing modes of finance at a scale that would necessitate any meaningful change in monetary policy and its tools. Finally, the paper briefly contemplates on some of the reasons for this situation and makes few suggestions for future research. لقد مثل اقتراح استبدال النظام المصرفي القائم على الفائدة بنظام بنكي قائم على الربح والخسارة (PLS) واحدة من أهم الوجوه البارزة في عملية "أسلمة" النظم الاقتصادية المعاصرة، فمع نهاية السبعينيات أصبح لمفهوم البنك الإسلامي شعبية كبيرة. في المقابل تطلب هذا الوضع ضرورة القيام بأبحاث تحليلية معمقة لانعكاسات تطبيق هذا النظام على مستويات الادخار، والاستثمار، واستقرار الاقتصاد ثم السياسة المالية. تحاول هذه الورقة القيام بتقييم نقدي لبعض النماذج النظرية التي قدمت في هذا الحقل لمحاولة الوقوف على مساور القلق المختلفة. لقد لوحظ خلال هذه الفترة أنه على الرغم من بقاء العديد من الأسئلة من غير إجابة، إلا أن الأبحاث المتعلقة بـهذا الجانب قد قلَّت نظراً لعدم اعتماد البنوك الإسلامية على آلية الربح والخسارة في أدواتـها المالية بدرجة تتطلب تغييراً معتبراً في السياسة المالية وأدواتـها، وفي الختام تقدم الورقة باختصار بعض التأملات حول أسباب هذه الوضعية مع تقديم توصيات للأبحاث في المستقبل.

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  • Shamim Ahmad Siddiqui, 2008. "An Evaluation of Research on Monetary Policy and Stability of the Islamic Economic system تقييم الأبحاث المتعلقة بالسياسة والاستقرار المالي لنظام الاقتصاد الإسلامي," Papers and books based on the proceedings of the Conferences organized by the Islamic Economics Institute, KAAU. 51, King Abdulaziz University, Islamic Economics Institute..
    • Handle: RePEc:abd:ieicfp:51
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    References listed on IDEAS

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    1. Shamim Ahmad Siddiqui & Asad Zaman, 1989. "INVESTMENT AND INCOME DISTRIBUTION PATTERN UNDER MUSHARKA FINANCE: The Uncertainly Case," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 8(1), pages 31-71.
    2. Hamid Zangeneh, 1995. "A Macroeconomic Model of an Interest-free System," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 34(1), pages 55-68.
    3. John R. Presley & A. J. Westaway, 1990. "Book Review: M. Umer Chapra: Towards a Just Monetary System The Islamic Foundation Leicester, Reviewed by مراجعة علمية لكتاب: نحو نظام نقدي عادل - تأليف: محمد عمر شابرا - مراجعة: جون بريسلي وأي جي وات," Book reviews and book reports published in the Journal of King Abdulaziz University: Islamic Economics. 496, King Abdulaziz University, Islamic Economics Institute..
    4. Medhat Hassanein, 1985. "Book Review: Ziauddin Ahmad, Munawar Iqbal and Fahim Khan: Money and Banking in Islam, Reviewed by: Medhat Hassanein مراجعة علمية لكتاب: ضياء الدين أحمد ، منور إقبال وفهيم خان: المال والأعمال المصرفية," Journal of Research in Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 3(1), pages 93-99, January.
    5. Hasan, Zubair, 1991. "Comments on Mohsin S. Khan and Abbas Mirakhor, The Financial System and Monetary Policy in an Islamic Economy," MPRA Paper 3183, University Library of Munich, Germany.
    6. Obiyathulla Ismath Bacha, 1995. "Conventional Versus Mudarabah Financing: An Agency Cost Perspective," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 4(2), pages 33-50, DECEMBER.
    7. Mohsen Fardmanesh & Shamim A. Siddiqui, 1994. "Financial Instability and the Share Economy," Eastern Economic Journal, Eastern Economic Association, vol. 20(1), pages 75-84, Winter.
    8. Hasan, Zubair, 1985. "Determination of Profit and Loss Sharing Ratios in Interest-Free Business Finance," MPRA Paper 3013, University Library of Munich, Germany.
    9. Zubair Hasan, 1985. "Determination of Profit and Loss Sharing Ratios in Interest-free Business Finance العوامل المحدِّدة لنسب المشاركة في الربح والخسارة," Journal of Research in Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 3(1), pages 13-29, January.
    10. Siddiqi, Mohammad Nejatullah, 2006. "Islamic Banking And Finance In Theory And Practice: A Survey Of State Of The Art," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 13, pages 2-48.
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    12. Zubair Hasan, 1991. "Mohsin S. Khan and Abbas Mirakhor: The Financial System and Monetary Policy in an Islamic Economy, Comment: محسن س. خان وعباس ميراخور: النظام المالي والسياسة النقدية في اقتصاد إسلامي ، تعليق: زبير حسن," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 3(1), pages 83-91, January.
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    Cited by:

    1. Uddin, Md Akther, 2016. "Reemergence of Islamic Monetary Economics: A Review of Theory and Practice," MPRA Paper 72081, University Library of Munich, Germany.
    2. Renaud Bouchard, 2009. "Sovereign Wealth Funds and Islamic Finance," Revue d'Économie Financière, Programme National Persée, vol. 9(1), pages 233-239.
    3. Ewa Karwowski, 2012. "Islamic banking," Chapters, in: Jan Toporowski & Jo Michell (ed.), Handbook of Critical Issues in Finance, chapter 25, pages i-ii, Edward Elgar Publishing.
    4. Bashir Baba & Shafie Mohamed Zabri & Ahmad Kaseri, 2018. "Assessing the Influence of Islamic Banks' Products' Quality Features on Customer Satisfaction in Nigeria," Traektoriâ Nauki = Path of Science, Altezoro, s.r.o. & Dialog, vol. 4(6), pages 4001-4015, June.
    5. Zubair Hasan, 2010. "Islamic Banks: Profit Sharing Equity and Credit Control البنوك الإسلامية: ربحية التمويل القائم على الشراكة ومراقبة الائتمان," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 23(1), pages 131-147, January.
    6. Renaud Bouchard, 2009. "Fonds souverains et finance islamique," Revue d'Économie Financière, Programme National Persée, vol. 9(1), pages 251-257.

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