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The Design Of Instruments For Government Finance In An Islamic Economy

Author

Listed:
  • NADEEM UL HAQUE

    (Research Department and Executive Director in IMF)

  • ABBAS MIRAKHOR

    (Research Department and Executive Director in IMF)

Abstract

This paper attempts to present a viable approach for the design of an instrument of government finance (and monetary management) in an Islamic economy where conventional transactions based on an ex-ante promise of a risk-free rate of return are forbidden. Resources to finance government infrastructural and development projects can be mobilized through the issuance of a national participation paper (NPP) and this instrument can also serve as an instrument of monetary management. Various conceptional issues underpinning the introduction of such an instrument and methods of calculating a corresponding rate of return are discussed In principle, this approach has been accepted in Iran.

Suggested Citation

  • Nadeem Ul Haque & Abbas Mirakhor, 1999. "The Design Of Instruments For Government Finance In An Islamic Economy," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 6, pages 27-43.
    • Handle: RePEc:ris:isecst:0089
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    References listed on IDEAS

    as
    1. Abbas Mirakhor, 1996. "Cost Of Capital And Investment In A Non-Interest Economy," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 4, pages 35-47.
    2. Nurun N. Choudhry & Abbas Mirakhor, 1997. "Indirect Instruments Of Monetary Control In An Islamic Financial System," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 4, pages 28-65.
    3. Mirakhor, Abbas, 1993. "Equilibrium in a Non-Interest Open Economy," MPRA Paper 56011, University Library of Munich, Germany.
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    Cited by:

    1. Mohammad Nejatullah Siddiqi, 2006. "Islamic Banking And Finance In Theory And Practice: A Survey Of State Of The Art," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 13, pages 2-48.
    2. Mirakhor, Abbas, 2010. "Whither Islamic Finance? Risk Sharing in An Age of Crises," MPRA Paper 56341, University Library of Munich, Germany.
    3. Mirakhor, Abbas, 2007. "Islamic Finance and Globalization: A Convergence?," MPRA Paper 56026, University Library of Munich, Germany.
    4. Mirakhor, Abbas, 2012. "Islamic Finance, Risk Sharing and Macroeconomic Policies," MPRA Paper 56338, University Library of Munich, Germany.
    5. Mughees Shaukat & Datuk Othman Alhabshi, 2015. "Instability of Interest Bearing Debt Finance and the Islamic Finance Alternative By Mughees Shaukat & Datuk Othman Alhabshi," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 23, pages 29-84.
    6. Ms. Faezeh Raei & Mr. Selim Cakir, 2007. "Sukuk vs. Eurobonds: Is There a Difference in Value-at-Risk?," IMF Working Papers 2007/237, International Monetary Fund.

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