Islamic financial reform and macroeconomc policies: a case of Malaysia
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Malaysia's overarching economic objective is to achieve developed country status by the year 2020. On the back of sluggish global economic condition and tight fiscal space, the economy will need to grow by a stable and rapid rate over the next few years. Currently, macroeconomic policies in Malaysia follow the conventional model based on the risk-transfer paradigm. Over the next decade, the potential for risk sharing as an alternative to risk transfer is expected to grow rapidly. As pointed out by a number of scholars and researchers, economies can be made more resilient to shocks by adopting financing methods that limit risk transfer (interest rate based debt contracts) and allow greater risk sharing among the market participants on a broad scale. Risk sharing is also the essence of Islamic finance.
Monetary and fiscal policy , Equity participation shares , Risk sharing
Mat Sari, N., Othman, A., Alhabshi, S. O., & Mirakhor, A. (2015, March 23-24). Islamic financial reform and macroeconomc policies: a case of Malaysia. Paper presented at the 10th International Conference on Islamic Economic and Finance (ICIEF 2015), Doha, Qatar.