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Article
Publication date: 19 June 2018

Zubair Hasan

The purpose of this paper is to explore the causes and impact of predatory online publishing on Islamic economics and finance.

2029

Abstract

Purpose

The purpose of this paper is to explore the causes and impact of predatory online publishing on Islamic economics and finance.

Design/methodology/approach

The method adopted involves a library literature scan to identify the origin and expansion of predatory publishing, as references listed in the paper show. The personal experience and observation of the author over the decades of teaching at various universities endorses the evidence.

Findings

The focus on “publish or perish” has led to division of Islamic scholars into conservative and modern economists, and it led to the overuse of mathematical and parametric modeling to the disadvantage of the discipline essentially imbued with unquantifiable ethical norms and values.

Practical implications

The study seeks to induce fruitful and purposive change in the research designs and direction of Islamic economics and finance.

Originality/value

This research initiates discussion on predatory publishing, an issue so far untouched in Islamic economics. It explores its impact on the discipline and suggests ways to curb the malady.

Details

ISRA International Journal of Islamic Finance, vol. 10 no. 1
Type: Research Article
ISSN: 0128-1976

Keywords

Article
Publication date: 4 April 2008

Zubair Hasan

To reopen for discussion the issue of credit creation and control in the area of Islamic banking.

3167

Abstract

Purpose

To reopen for discussion the issue of credit creation and control in the area of Islamic banking.

Design/methodology/approach

In view of a rapid expansion of Islamic banking in recent decades, the answer to questions whether Islamic banks can create credit like mainstream banks and, if yes, what methods central banks could use to control it in their case is of paramount importance. An overview of the literature on the subject is provided and credit creation process is explained as background material for the discussion.

Findings

The literature on the subject is scanty, controversial and inconclusive. One reason seems to be the mismatch between structural design of Islamic banks and the objectives they are supposed to meet. It is concluded that Islamic banks can create credit in the usual manner but central banks will have to design new tools for credit control applicable to Islamic banks.

Research limitations/implications

It is not a rigorous analytical exercise as the main purpose of the paper is to reopen an important issue for discussion. It is an opinioned work and presents rather tentative answers to the questions raised.

Practical implications

The findings of the paper may have serious implications for the current structure of Islamic banks and the legal framework for regulating their credit creation activities.

Originality/value

The paper draws attention to a rather neglected issue in Islamic banking and offers guidelines to resolve it.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 1 no. 1
Type: Research Article
ISSN: 1753-8394

Keywords

Content available
Article
Publication date: 3 April 2009

Zubair Hasan

523

Abstract

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 2 no. 1
Type: Research Article
ISSN: 1753-8394

Article
Publication date: 14 May 2018

Shafiu Ibrahim Abdullahi

The purpose of the study is to explore contributions made in Islamic economics methodology, particularly in the use of mathematical models used to build Islamic economic theories.

Abstract

Purpose

The purpose of the study is to explore contributions made in Islamic economics methodology, particularly in the use of mathematical models used to build Islamic economic theories.

Design/methodology/approach

The methodology adopted is a survey by means of literature review.

Findings

Overuse of mathematical models in economics has it apparent weakness in simplifying complex realities and use of impracticable assumptions. But, that notwithstanding, they have a role to play in the development of Islamic economics. Empirical analysis in Islamic economics has weaknesses, including the very fact that moral phenomenon in Islamic economics is difficult to quantify, but its contribution, just like mathematics, is needed to develop the field. Islamic economics adopt mathematical models that do not cause obstacles in achieving the aim of Islamic economics, which is Falah. Where it is harmful, it is discarded. Islamic economics has yet to have a universally accepted research methodology; instead, numerous methodologies are used today. The poor use of mathematics in Islamic economics by new researchers, among other factors, may be due to young researchers’ poor background in mathematics.

Originality/value

The paper is unique in looking at the topic of Islamic economic methodology from the angle of application of mathematical models.

Details

International Journal of Ethics and Systems, vol. 34 no. 2
Type: Research Article
ISSN: 0828-8666

Keywords

Article
Publication date: 10 November 2014

Necati Aydin

This paper aims to compare Pareto optimality for altruistic and individualistic societies to show whether it is possible to have Pareto improvement through altruistic acts…

Abstract

Purpose

This paper aims to compare Pareto optimality for altruistic and individualistic societies to show whether it is possible to have Pareto improvement through altruistic acts even after free market equilibrium.

Design/methodology/approach

The paper follows conceptual, axiomatic and theoretical approaches to show Pareto efficiency in altruistic versus individualistic societies. The paper first outlines the welfare axioms of Islamic economics compared to those of capitalism. Second, it defines Pareto efficiency within capitalist and Islamic economic systems. Third, it compares and contrasts the concept in the two systems based on their epistemological and anthropological worldviews. Fourth, it shows how – even under the efficient allocation of material goods – room for Pareto improvement still exists through the redistribution of resources. Finally, it demonstrates optimum income transfer for social welfare maximization.

Findings

The paper shows that Islamic economics relying on certain welfare axioms aim for an altruistic society. It then theoretically proves that social well-being would be greater in such an altruistic society in comparison to an individualistic society promoted by capitalism, holding everything else constant. The paper clearly shows that free market equilibrium does not maximize social utility. It theoretically demonstrates that even under efficient allocation of material goods, there is still room for Pareto improvement through redistribution of resources. It reveals that optimum income transfer might not be possible through voluntary altruistic behaviors unless people transcend self-interest and begin to value social interest as important as their own interest. Therefore, the paper suggests a role for the government to reach optimum-level income transfer for social welfare maximization.

Research limitations/implications

The paper is purely theoretical. Its main limitation is not to be empirically tested. Future studies might shed light on the issue through empirical evidence

Practical implications

Pareto improvement provides important guidance or at least moral justification for welfare programs. The paper might directly affect welfare policy of Muslim countries.

Social implications

The paper suggests income transfer through altruistic acts would provide higher social welfare. Therefore, it is in the best interest of nations to promote altruistic behaviors and support voluntary welfare programs for higher social utility.

Originality/value

The paper contributes to the Islamic moral economy doctrine by proving that altruistic behaviors encouraged by Islamic teaching could provide higher social welfare.

Details

Humanomics, vol. 30 no. 4
Type: Research Article
ISSN: 0828-8666

Keywords

Article
Publication date: 9 May 2016

Adam Abdullah

The purpose of this research is to present an Islamic monetary theory of value by analyzing real prices and real money in terms of gold and silver in Egypt from 696 to…

1266

Abstract

Purpose

The purpose of this research is to present an Islamic monetary theory of value by analyzing real prices and real money in terms of gold and silver in Egypt from 696 to 1517, a period of 821 years from the Umayyads to the Abbasids.

Design/methodology/approach

This paper adopts a quantitative empirical investigation derived from a full population of secondary data to deductively evaluate the measure and store of value functions of money, to affirm an Islamic monetary theory of value, which is also inductively researched through a qualitative interpretation of documentary and content analysis of Islamic and numismatic literature.

Findings

The Islamic monetary theory of value leads to an Islamic equation of exchange that reconfirms the outcome of this research, where a high value of money ensures low constant real prices over the long term.

Research limitations/implications

The findings are based on an empirical investigation involving a single price of wheat series as a reasonable proxy for changes in wholesale commodity prices generally, which was successfully adopted by other studies.

Practical implications

The significance for modern monetary policy is that monetary authorities should adopt an Islamic monetary theory of value to achieve genuine monetary and price stability.

Social implications

Through an Islamic equation of exchange, price stability would ensure real economic growth that protects wealth for holders of money due to a stable purchasing power, and combined with Islamic equity finance, more efficiency in allocating investible resources to increase gross domestic product and employment.

Originality/value

The Islamic monetary theory of value ensures that there is no transfer or confiscation of wealth through inflation, which would impart gains to the issuer due to the excessive supply of money in relation to demand.

Details

Humanomics, vol. 32 no. 2
Type: Research Article
ISSN: 0828-8666

Keywords

Article
Publication date: 11 September 2017

Aghilasse Kashi and Azhar Mohamad

This study aims to examine the disputable Shari’ah and the technical issues underlying the implementation of the Musharakah Mutanaqisah partnership (MMP) model in home…

Abstract

Purpose

This study aims to examine the disputable Shari’ah and the technical issues underlying the implementation of the Musharakah Mutanaqisah partnership (MMP) model in home financing by Islamic banks in Malaysia. It assesses whether this much-lauded facility is in line with Shari’ah rules and whether it diverges from or converges to the Bay’ Bithaman Ajil (BBA) and conventional loan models.

Design/methodology/approach

This study uses a qualitative methodology based on in-depth interviews to achieve these objectives.

Findings

With regard to the issue of convergence, it is obvious from the interviewees’ perceptions that the MMP model is converging with the BBA and conventional housing loans.

Originality/value

Many factors were mentioned as the reasons for this convergence, with the most important being that Islamic banks are not operating in a fully fledged Islamic financial system, reducing the risk weightage and regulatory restrictions. As for Shari’ah compliance, controversy may result from the enhanced features that structure this facility. Though these enhanced features are Shari’ah compliant, it transforms the MMP model into a debt rather than a partnership contract.

Details

International Journal of Law and Management, vol. 59 no. 5
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 1 January 1998

Hanafi Mohd. Noor

Razi's theory has an axiological and epistemological relevance that ethical values are established on knowledge model which is developed by interactive preferences between…

Abstract

Razi's theory has an axiological and epistemological relevance that ethical values are established on knowledge model which is developed by interactive preferences between polity and the value system. The point of departure for the understanding of the differences of Razi's human needs theory vis‐a‐vis the contemporary ideas are the metaphysical principle that underlies the notion of the theory. By means of this principle we come to understand the place of human being in the universe, his function and purpose in life and his final destination, therefore his needs and motivations. Thus an economic system based on Razi's human needs theory is an ethico‐economy which tilts neither toward socialism nor laissez‐faire capitalism. The notion of need can be interpreted as a reaction against allegedly value‐free or value‐neutral approaches in the social sciences. In this sense, the work of Razi can be most usefully seen as part of those ethical ideas which he invoked in the 12th century. Razi's writing on ethics that very closely related to philosophy is much less well known. Yet it is essential in an attempt to evaluate his contribution to the development of Islamic thought. The scope of his writings is remarkable, ranging from his early analyses of theological and legal controversies in the eastern part of the Muslim world, through a book on Qur'anic Exegesis and ethics; from medical sciences to his sustained polemic on credology and philosophy. In short, his writings embrace diversity of areas, from theology to philosophy, from natural to applied sciences including chemistry, astronomy and medicine. In his writings, he succeeded in proving his claim that excellence and perfection of man are not realized by means of bodily sensual pleasure. Rather, it is realized instead, by means of knowledge, power and excellent manners. This paper gives an account of the relevancies of knowledge‐based world view in the light of Razi's view of human needs. In dealing with this topic, two questions are explored: (1) what is his view of human needs? and, (2) what is the relevance of his view to ethics and economics?

Details

Humanomics, vol. 14 no. 1
Type: Research Article
ISSN: 0828-8666

Article
Publication date: 31 May 2022

Amine Ben Amar and AbdelKader O. El Alaoui

The purpose of this study is to understand the profit-sharing structure at equilibrium of the two-tier mudharaba contract in a pure Islamic banking system and then in a…

Abstract

Purpose

The purpose of this study is to understand the profit-sharing structure at equilibrium of the two-tier mudharaba contract in a pure Islamic banking system and then in a dual banking system.

Design/methodology/approach

This paper aims to better understand the profit-sharing structure at the equilibrium of the two-tier mudharaba. It first assumes a purely Islamic banking system and then introduces a risk-free asset to simulate trade-off opportunities in a dual banking system.

Findings

First, by using a model inspired from a neoclassical framework and assuming that the Islamic banks are the only channel for financing the economy, the results suggest that the profit-sharing structure built up by the three parties, the bank, the depositor and the entrepreneur, at the time of signing the Mudharaba contract has to be drawn up in the way that, at the ex post, the remuneration of each necessary production factor, capital and labor, should equal its marginal productivity. Second, the authors relax the hypothesis of a purely Islamic financial system and introduced a risk-free asset in favor of the depositor. Thereby, the authors are able to apprehend the financial balance of the two-tier mudharaba contract by simulating the trade-offs that can occur in a dual banking system. The findings suggest that the profit-sharing structure is not the same whether we are at the level of bank assets (bank–entrepreneur relationship) or liabilities (bank–depositor relationship). For the asset side, an increase (respectively decrease) in the expected profit of the mudharaba implies a decrease (respectively increase) in the share of the bank, whereas an increase (respectively decrease) in the return of the risk-free asset and/or the risk underlying the project implies an increase (respectively decrease) of the bank’s share in the expected profit.

Originality/value

Theoretical work that has studied the determinants of the ratio of profit sharing between capitalists and entrepreneurs in the context of mudharaba has omitted that this contract should be assessed at both asset and liability sides of the bank. To overcome this theoretical gap, this paper aims to better understand the structure of profit sharing at the equilibrium of the two-tier mudharaba, while taking into account the contractual specificities between the different stakeholders.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 6 November 2018

Ildus Rafikov and Elmira Akhmetova

This paper aims to examine the concepts of scarcity and abundance from an interdisciplinary perspective. It argues that the idea of economics, as the study of human…

Abstract

Purpose

This paper aims to examine the concepts of scarcity and abundance from an interdisciplinary perspective. It argues that the idea of economics, as the study of human behavior with regard to scarce resources and unlimited wants, leads to competition, confrontation and conflict, whereas the nature of humans is that of kindness, cooperation and sharing.

Design/methodology/approach

The paper uses content analysis of texts from multiple disciplines, using both deductive and inductive logic, to study the situation of scarcity and abundance, explore reasons and offer remedies. The paper consists of seven sections, five of which are the main discussion. Section 2 looks at the concepts of scarcity and abundance. Section 3 presents reasons for scarcity: economic and behavioral. Section 4 discusses the civilization perspective of poverty and wealth. Section 5 briefly looks at sustainable development and good governance. Section 6 argues in favor of simplicity and spirituality as remedies for the problem of scarcity, and Section 7 concludes the paper.

Findings

The paper demonstrates the relativity of the concepts of scarcity and abundance, points out the paradox of the modern consumer economies and argues that simplicity, spirituality and universal values are necessary to remedy the ills of overconsumption/overproduction, waste and inequality.

Originality/value

This paper offers spirituality and ethics-based remedies for the negative consequences of neo-classical economics and social Darwinism.

Details

International Journal of Ethics and Systems, vol. 35 no. 1
Type: Research Article
ISSN: 0828-8666

Keywords

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