Sukuk Market and Economic Welfare Nexus: A Partial Equilibrium Approach

Jamel Boukhatem
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Jamel Boukhatem: Deanship of Scientific Research, Umm Al-Qura University, Mecca, Saudi Arabia,

International Journal of Economics and Financial Issues, 2021, vol. 11, issue 3, 142-145

Abstract: Due to its distinctive features and investment quality, sukuk as an Islamic alternative to bond financing, have known last decades a worldwide interest and a rapid widespread, particularly after the 2007-2008 global financial crisis. Despite the global market prevalence of sukuk, the literature on the sukuk economic wealth nexus still inexistant. In this study, we develop a basic model that captures the welfare effects of sukuk markets. The main finding shows the importance of a well-developed sukuk market in hedging interest rate and inflation risks effectively and, thereby improving investor welfare.

Keywords: Sukuk; Economic welfare; Partial equilibrium (search for similar items in EconPapers)
JEL-codes: D53 D60 G15 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2021-03-15

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