The Nature of Money in Modern Economy – Implications and Consequences

Al-Jarhi, Mabid (2016): The Nature of Money in Modern Economy – Implications and Consequences. Published in: JKAU: Islamic Econ , Vol. 29, No. No. 2, pp: 75-79 (July 2016) (July 2016): pp. 75-79.

Abstract

Reforming the contemporary monetary and financial system has come under the limelight with the onset of the last international financial crisis. Zarlenga and Poteat focus on the elimination of credit money and the return of the exclusive right of issuing money to the government as a key to reforming the system. In this comment, I argue that they are right, but reform should be wider and more comprehensive. My arguments are inspired by Al-Jarhi’s model of an Islamic monetary system (1981)

• Item Type: MPRA Paper
• Language: English
• Keywords: money, definition of money, monetary reform, Chicago Plan, Islamic economics, monetary policy, interest rate, seigniorage, Friedman's rule, information asymmetry, classical loan contract, Islamic finance
• Subjects: E - Macroeconomics and Monetary Economics > E0 - General; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E19 - Other; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy

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Zarlenga, Stephen and Robert Poteat (2016), “The Nature of Money in Modern Economy – Implications and Consequences,” JKAU-IE, vol. 29, No. 2, pp. 57-73.