Islamic Finance and the Fluctuations of Investment and Output: The Role of Monetary Policy

Mehdi Hadian
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Mehdi Hadian: Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran

Journal of Money and Economy, 2017, vol. 12, issue 3, 277-293

Abstract: The recent global financial crisis once again revealed the harmful effects of interest-based contracts in the conventional financial system. Islamic finance, as an alternative financial system, discourages interest rate and debt financing. This paper investigates the effects of two financial systems, namely the conventional and Islamic systems, on macroeconomic variables.

Keywords: Islamic Finance; Investment; Macroeconomic Stability; DSGE (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:mbr:jmonec:v:12:y:2017:i:3:p:277-293

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