The Design of Instruments For Government Finance in An Islamic Economy

Nadeem ul Haque and Abbas Mirakhor ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Government finance; monetary management; Islamic economy (search for similar items in EconPapers)
JEL-codes: H63 P43 (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (12)

Published in Islamic Economic Studies 2.6(1999): pp. 27-43

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:56028

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