Macroeconomic Policy and Islamic Finance in Malaysia

1. Front Matter

   Pages i-xxiii

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2. Introduction

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 1-19

3. Risk Transfer, Risk Sharing, and Islamic Finance

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 21-35

4. Macroeconomic Policies and Risk Transfer

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 37-51

5. Islamic Finance, Risk Sharing, and Macroeconomic Policies

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 53-76

6. History of Islamic Finance in Malaysia

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 77-101

7. Fiscal Policy and Islamic Finance: Malaysia

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 103-173

8. Monetary Policy and Islamic Finance: Malaysia

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 175-237

9. Policy Recommendations

   • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

   Pages 239-261

10. Concluding Remarks

    • Azura Othman, Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

    Pages 263-272

11. Back Matter

    Pages 273-293

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This book offers an alternative framework for macroeconomic policy in Malaysia, derived from the universal principles of social justice espoused in the objectives of the Shariah. It attempts to holistically analyze issues related to public finance, which has been criticized for lack of transparency and justice in wealth distribution. This book explores these criticisms and discusses the principles of Islamic finance that may be applied to macroeconomic policymaking to create a better economy overall. It presents a case for a flat tax system, to make the economy more resilient to shocks, and financing methods that limit interest-rate-based debt contracts and allow greater risk sharing among the market participants on a broad scale. Using both qualitative and quantitative methods, this book models the Malaysian economy based on policies that apply the fundamental Islamic finance principle of risk sharing to demonstrate its benefits in spurring growth, promoting distributive justice, rendering the economy more stable, strengthening the potency of monetary policy, enhancing fiscal governance, and improving financial inclusion. The book will be of interest to students, policymakers, financial institutions, researchers, ministries of finance, central banks, securities commissions, and anyone interested in alternative economic paradigms.

• Islamic macroeconomic policy
• Risk sharing
• macroeconomics
• Equity participation instrument
• Fiscal policy
• Monetary policy
• economic policy
• public policy
• Flat Tax
• islamic finance

• Chartered Institute of Islamic Finance Professionals, Kuala Lumpur, Malaysia

  Azura Othman

• International Centre for Education in Islamic Finance, Kuala Lumpur, Malaysia

  Norhanim Mat Sari, Syed Othman Alhabshi, Abbas Mirakhor

Azura Othman is Chief Executive Officer of the Chartered Institute of Islamic Finance Professionals (CIIF) and an Independent Non-Executive Director of Bank Muamalat Malaysia Berhad.
 
Norhanim Mat Sari is a faculty member at the International Centre for Education in Islamic Finance (INCEIF), where she obtained her PhD in Islamic Finance.
 
Syed Othman Alhabshi is Deputy President Academic of INCEIF. He has written and edited a total of 12 books and numerous journal articles on various topics related to Islam, economics, and banking.
 
Abbas Mirakhor is First Holder of the INCEIF Chair of Islamic Finance. He formerly served as Executive Director and Dean of the Executive Board of the International Monetary Fund (IMF).

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