Money creation and control from Islamic perspective
AbstractThis paper deals with familiar facts in monetary economics from an unfamiliar angle. It argues that it is not factual to regard the legal tender money and bank credit as of different genus: they work in tandem to the same ends in an economy, conventional or Islamic. Also, it does not matter what serves as money – solid gold or flimsy paper – for keeping its value stable; only the blind would argue that staff is indispensable for walking. Money is just an instrument: it was never nor can ever be classified into Islamic and non-Islamic. What it does – good or bad – depends on how we use it. Money does not generate crises; its mismanagement does. It follows that the refuge the world is searching today from recurring financial crises does not lie in money substance: history testifies that national economies could not remain turmoil-free during the centuries of the yellow metal sway over the monetary scene. The paper concludes that it is the human factor that has been the source of good or evil for mankind including money matters. And the quality of human factor true religion can alone improve: morality without faith is rudderless.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 28366.
Date of creation: 23 Jan 2011
Date of revision:
Key words: Monetary policies; Gold standard; managed currency; Islamic banking; Central banks;
Other versions of this item:
- Hasan, Zubair, 2011. "Money creation and control from Islamic perspective," MPRA Paper 39796, University Library of Munich, Germany, revised 21 Dec 2011.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
- B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-05 (All new papers)
- NEP-ARA-2011-02-05 (MENA - Middle East & North Africa)
- NEP-CWA-2011-02-05 (Central & Western Asia)
- NEP-HIS-2011-02-05 (Business, Economic & Financial History)
- NEP-HPE-2011-02-05 (History & Philosophy of Economics)
- NEP-MAC-2011-02-05 (Macroeconomics)
- NEP-MON-2011-02-05 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hasan, Zubair, 2008.
"Credit creation and control: an unresolved issue in Islamic banking,"
8130, University Library of Munich, Germany, revised 07 Apr 2008.
- Zubair Hasan, 2008. "Credit creation and control: an unresolved issue in Islamic banking," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, Emerald Group Publishing, vol. 1(1), pages 69-81, April.
- Hasan, Zubair, 2007. "Ensuring exchange rate stability: Is return to gold (Dinar)possible?," MPRA Paper 8134, University Library of Munich, Germany.
- Cizakca, Murat, 2010. "The case against the Islamic gold dinar," MPRA Paper 26645, University Library of Munich, Germany.
- Hasan, Zubair, 2009. "Profit sharing ratios in mudaraba contract revisited," MPRA Paper 21843, University Library of Munich, Germany, revised 2010.
- Gary Gorton & Lixin Huang, 2002. "Banking Panics and the Origin of Central Banking," NBER Working Papers 9137, National Bureau of Economic Research, Inc.
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