LESSONS LEARNED FROM REPEATED FINANCIAL CRISES: AN ISLAMIC ECONOMIC PERSPECTIVE
| العنوان: | LESSONS LEARNED FROM REPEATED FINANCIAL CRISES: AN ISLAMIC ECONOMIC PERSPECTIVE |
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| المؤلفون: | Ascarya Ascarya |
| المصدر: | Bulletin Ekonomi Moneter dan Perbankan, Vol 12, Iss 1, Pp 27-74 (2010) |
| بيانات النشر: | Bank Indonesia, 2010. |
| سنة النشر: | 2010 |
| مصطلحات موضوعية: | Finance, business.industry, media_common.quotation_subject, Fiat money, Money supply, Monetary economics, Narrow banking, Seigniorage, Interest rate, Currency, Financial crisis, lcsh:Finance, lcsh:HG1-9999, Economics, business, Subprime mortgage crisis, media_common |
| الوصف: | Financial crises have been repeated again and again over a long period of time since the demise of gold regime in 1915, have been temporarily subsided in the period under Bretton Woods Agreement with gold standard in 1950-1972, and have been reemerged after the collapse of Bretton Woods Agreement with higher frequency and magnitude. The recent subprime mortgage crisis in the US has spread out throughout the world threatening global meltdown. It seems that the conventional world have not really learned the lessons and have handled the crisis only partially in the symptoms without touching the root cause of the crisis. This study tries to determine the anatomy and root causes of the crisis and layout strategies to cure it using analytic descriptive and quantitative approaches under Islamic perspectives.The study concludes that the root causes of the crisis from Islamic economic perspective can be human error and natural phenomenon uncontrollable by human. Human error can be divided into three groups, namely (1) moral decadences that trigger (2) system or conceptual flaws and (3) internal weaknesses. Conceptual system flaws include 1) excess money supply from seigniorage, fractional reserve banking system, credit card and derivatives; 2) Speculation; 3) interest system; 4) international monetary system; and 5) real and monetary sectors decoupling.Empirical results show that riba rooted causes of financial crises (excess money supply 2.8%, interest rate 45.2%, and exchange rate 18.6%) give 66.6% share to financial crises in Indonesia, while if we substitute these three systems according to Islamic perspective (just money supply 0.7%, PLS return 2.5%, and single global currency 0.2%) will give only 3.4% share to financial crises in Indonesia, or a massive reduction of 63.2%.JEL Classification: E44, E51, G21Keywords: Financial Crisis, Fiat Money, Fractional Reserve, Interest, Speculation, Narrow Banking, Profit-and-Loss Sharing, Single Global Currency. |
| اللغة: | Indonesian |
| تدمد: | 2460-9196 1410-8046 |
| الوصول الحر: | https://explore.openaire.eu/search/publication?articleId=doi_dedup___::58e2199f4d35202fe42199933150cfe8Test https://www.bmeb-bi.org/index.php/BEMP/article/view/466Test |
| حقوق: | OPEN |
| رقم الانضمام: | edsair.doi.dedup.....58e2199f4d35202fe42199933150cfe8 |
| قاعدة البيانات: | OpenAIRE |
| تدمد: | 24609196 14108046 |
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