A Monetary and Financial Structure for an Interest-Free Economy: Institutions, Mechanism & Policy

Al-Jarhi, Mabid (1980): A Monetary and Financial Structure for an Interest-Free Economy: Institutions, Mechanism & Policy. Published in: Z. Ahmad, M. Iqbal and M.F. Khan, eds., Money and Banking in Islam No. Center for Research in Islamic Economics, Jeddah, and the Institute of Policy Studies, Islamabad, (1983): pp. 1-38.

Abstract

This paper attempts to outline a possible financial structure for an interest-free economy, which would conform to the Islamic principles. The basic characteristics of that economy are not new. Pioneers in Islamic economics have mentioned them previously1. However, they were scattered in many writings and under diverse Topics2. Yet those attempts have opened a path to this topic to be handled in an effective manner.

• Item Type: MPRA Paper
• Language: English
• Keywords: money, banking, interest rate, lending-based processes, productivity-based processes, centered, money issue, allocation of financial resources, fiat money, money creation, fractional reserves, total reserves, money supply, growth, prices, monetary expansion, inflation, consumption, investment, equilibrium.
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

References

1. Al-Jarhi, Mabid Ali (1975), The Optimal Supply of Money and Optimal Monetary Policies, unpublished Ph. D. dissertation, University of Southern California, especially Ch. VI.

2. Al-Jarhi, Mabid Ali (1983), “A Monetary and Financial Structure for an Interest-Free Monetary Economy: Institutions, Mechanism and Policy”, presented to Seminar on Monetary and Fiscal Economics, Islamabad, Jan., 1981, in Z. Ahmad, M. Iqbal and M. Fahim Khan, eds., Money and Banking in Islam, Center for Research in Islamic Economics, Jeddah, and the Institute of Policy Studies, Islamabad.

3. Al-Jarhi, Mabid Ali (2000), “Remedy For Banking Crises: What Chicago And Islam Have In Common: A Comment,” Conference on the Islamic Financial Industry, University of Alexandria and the Islamic Research and Training Institute, the Islamic Development Bank, Alexandria, October.

4. Al-Jarhi, Mabid Ali (2003), “The Case for Universal Banking as a component of Islamic Banking,” the International Seminar on Islamic Banking: Risk Management, Regulation and Supervision, organized by: the Ministry Finance, Indonesia, the Central Bank Indonesia and the Islamic Research and Training Institute of Islamic Development Bank, Jakarta, Indonesia, September 30 - October 2.

5. Al-Jarhi, Mabid Ali and Munawar Iqbal (2001), Islamic Banking: Answers to Some Frequently Asked Questions, Occasional Paper No. 4, Islamic Research and Training Institute, Jeddah.

6. Chapra, M. Umer (1978), "Money and Banking in the Islamic Framework", International Seminar on Monetary and Fiscal policies of Islam, Makkah Almukarramah, Oct.

7. Friedman, M. (1969), The Optimum Quantity of Money ", in The Optimum Quantity of Money and other Essays, Chicago Aldine Publishing Co., 1-50.

8. Friedman, M., A (1959), Program for Monetary Stability (New York: Fordham University Press.

9. Mints, L. W. (1950), Monetary Policy for a Competitive Society (New York: McGraw-Hill Book Co.)

10. Musgrave, R.A. (1950), The 'Theory of Public Finance, New York, McGraw-Hill.

11. Samuelson, Paul (1968), " What Classical and Neoclassical Monetary Theory Really was, “Canadian Journal of Economics”, 1 (February), 7-10.

12. Samuelson, Paul (1969), “NonoptimaIity of Money Holdings Under Laissez Faire “, Canadian Journal of Economics, 2 (May), 303-308.

13. Siddiqi, M. Nejatullah’’ (1978), Islamic approaches to Money, Banking, and monetary Policy,” International Seminar on Monetary and Fiscal Economics of Islam, Makkah Almukarramah, Oct.

14. Tobin, J. (1958), “Liquidity Preference as Behavior Towards Risk,” Review of Economic Studies, (February), 833-873.

15. Tobin, J. (1968), “Notes on Optimal Monetary Growth”, Journal of Political Economy, 76 (July/August), 833-873.

16. Tolly, G. S. (1957), “providing for Growth of the Money Supply”, Journal of Political Economy, 65 (December), 465-485, especially PP. 477-484.