Micro-money, finance and real economy interrelationship in the framework of Islamic ontology of unity of knowledge and the world-system of social economy

2018 ◽  
Vol 45 (2) ◽  
pp. 445-462 ◽  
Author(s):  
Masudul Alam Choudhury
Keyword(s):  
Real World ◽  
Social Economy ◽  
Well Being ◽  
Social Implications ◽  
Real Economy ◽  
Reserve Requirement ◽  
Content Type ◽  
The Real ◽  
Monetary System ◽  
Unity Of Knowledge

Purpose The purpose of this paper is to explain the structure of Islamic monetary transformation into 100 percent reserve requirement monetary system in terms of the foundational epistemology of the unity of divine knowledge (tawhid). This approach is a scholarly originality in the field of epistemological formalism concerning Islamic theory and perspectives in economic reasoning in comparative perspectives. Design/methodology/approach The role of micro-money pursuing projects and real economic exchange relations is shown to arise by a natural causality in the ethical social economy (SE). This results in a microeconomic perspective of the quantity theory of money with ethical and social implications. A comparative study of endogenous money in the quantity theory of money points out significant differences between the theory of endogenous money in Islam and mainstream methodologies. A formal model of micro-money and its organismic endogenous relationship with the real economy is formulated with the goal of realizing social well-being, economic stabilization, and sustainability of development regimes. Findings This is a conceptual paper, though with the potential for continued work in applying the theory of micro-money in the Islamic methodological perspective of unity of knowledge. This is an original contribution of this paper. Islamic economists have not been able to produce a rigorous theory of micro-money. They have also not been able to situate the study of Islamic economics with its specific contribution to the field of the nature of money in project-specific financing of Islamic projects by the money-finance-real economy inter-causal relations. Thus, the findings of this paper, though of the conceptual nature, open doors to a vast field of methodological development and its application to the problem of micro-money modeling. Such a conceptual finding arising from the methodological theory of unity of knowledge and applied to the topic of micro-money along with some examples of potentiality of these approaches constitutes a vastly original field of findings as contribution. Thereby, an analytical model is established in the Islamic social economy (ISE) perspective. The model is used to explain monetary transmission and functioning of monetary policy with instruments that avoid interest rate and comply with Islamic financing requirements. The resulting model of money, finance, and real economy (MFE) systemic interrelationship in reference to the epistemology of unity of knowledge leads into the construction of a 100 percent reserve requirement monetary system with the gold-backed micro-money as currency complementing real economic transactions. Research limitations/implications The present paper is of a conceptual type based on the essential ontological and epistemological foundation of Islamic social and economic thought and bearing a deeply scientific implication. The conceptual part of this paper becomes a study in the foundations. The second part follows into the study of application in the real world of micro-money in terms of financing projects. Micro-money pursues projects in the Islamic economy due to its very nature of ethical and social choices. The paper shows that such a micro-money transmission is realized by the money-finance-real economy integrated model. Thereby, some real-world examples of such transformations are given. All these together substantiate the conceptual-analytical-empirical nature of the study conducted. Practical implications The development of the micro-money transmission system of generalized circular causation interrelations between MFE activities as a return to 100 percent reserve requirement monetary system with the gold standard is the profound theory that has been propounded. Its applied perspectives are implied through the MFE-model wherein micro-money pursues social projects. Furthermore, the possibility and practicality of such a conceptual model of micro-money and its transmission mechanism in the real economy are established by real-world examples of kinds of micro-money that are found to circulate or are recommended by some studies in the literature. Social implications The conceptual part of the paper presents a model of generalized epistemological model of unity of knowledge characterizing the MFE circular causal interrelations as the organismic meaning of social ethics and evolutionary learning. The social implications are the epistemic foundations of the derived model in the midst of choices of life-fulfillment projects that micro-money finances and the economy sustain. Originality/value This is an original paper premised on the general and the specific Islamic epistemological criterion of unity of knowledge as a generalized system theory. It is now particularized to the case of money and real economy by using the Islamic perspective of creating conditions to regenerate resources continuously in SE with ethical implications. The paper is equally informative to all who like to understand the social and ethical nature of endogenous relations between money and the real economy as two great institutions of the national economy. These together bestow well-being to the society at large in the construction of SE. Specific attention in this regard is given to ISE.

The Future of Monetary Reform and the Real Economy

2013 ◽  
pp. 307-338
Keyword(s):  
Interest Rates ◽  
Gold Standard ◽  
Formal Model ◽  
Banking System ◽  
Real Economy ◽  
Monetary Reform ◽  
The Real ◽  
Monetary System ◽  
Analytical Result ◽  
Unity Of Knowledge

The further analytical result derived from the previous chapters on the money and real economy relationship with financial bridging in a gold-standard system is now further extended to the requirement of the 100% Reserve Requirement Monetary System with the Gold-Standard. The formal model in this regard is developed in order to bring out the power of unity of the ethical worldview of avoiding interest rates and its replacement by trade instruments. The relationship between the Central Bank, commercial banks, and the real economy with the interest-replacing trade instruments is explained. The resulting configuration of the financial and banking system in this regard under the episteme of unity of knowledge is made to explain how stabilization is attained in this same kind of epistemic worldview and its monetary and real economy interrelationship. Thus, the socio-cybernetic worldview of pervasive complementarities, equivalently participation, representing unity of knowledge in the good things of life, is once again expounded.

Quantitative modeling of mathematical relationships in money, spending and the real economy

Kybernetes ◽  
2016 ◽  
Vol 45 (2) ◽  
pp. 323-336 ◽  
Author(s):  
Masudul Alam Choudhury ◽  
M. Ishaq Bhatti
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Commercial Bank ◽  
Quantitative Modeling ◽  
Real Economy ◽  
Causal Relations ◽  
Content Type ◽  
The Real ◽  
Unity Of Knowledge

Purpose – The purpose of this paper is to bring out the topic of ethics and economics in reference to the nature of complementarities that can exist between monetary and fiscal activities. The connector in such complementarities is the unity of knowledge that can be generated in the inter-causal relations between monetary and fiscal activities. Design/methodology/approach – The methodology adopted is of measuring out by quantitative modeling how well there exists complementary relations or otherwise between the Central Bank and commercial bank in order to mathematically explain the role of participatory learning behavior using money, debt, and spending variables. Findings – The argument placed takes the conceptual form of result to show that there would be a prolonged extension of the non-inflationary and technological induction of economic growth in a regime of complementing money and fiscal policies. Originality/value – The role of the quantity of money in a non-inflationary economic growth is set against the background of the tripartite inter-causal relationships between the Central Bank, the commercial bank, and the real economy. Analytical methods used bring out the role of knowledge in the inter-causal relations termed as circular causation for the attainment of social well-being in response to a stable and advancing economy with the ethicality of unity of knowledge.

The Moral Content of Monetary History

2013 ◽  
pp. 65-99
Keyword(s):  
Interest Rate ◽  
Open Economy ◽  
Phenomenological Model ◽  
Analytical Method ◽  
Functional Approach ◽  
Real Economy ◽  
The Real ◽  
Monetary System ◽  
Moral Content ◽  
Unity Of Knowledge

The previous chapters are carried forth with a greater emphasis on money and the real economy with the financial bridge between these systems. The argument of the gold-backed monetary system is explained from both the historical and contemporary viewpoints. The phenomenological model of unity of knowledge is applied to the case of monetary and real economy systems with the financial connection. The open economy case of trade in the absence of interest rate is examined. The analytical method of circular causation in this regard is pointed out as a functional approach that is taken up profusely throughout this work.

scholarly journals The Future of Monetary Reform and the Real Economy: A Problem of Trade Versus Interest

2012 ◽  
Author(s):  
Masudul Alam Choudhury ◽  
Sofyan Syafri Harahap
Keyword(s):  
Interest Rate ◽  
Inverse Relationship ◽  
Resource Mobilization ◽  
Real Economy ◽  
Monetary Reform ◽  
Reserve Requirement ◽  
The Real ◽  
Monetary System ◽  
Life Itself ◽  
Institutional Relations

The prologue is our starting premise.   The Qur’an (2: 275) declares, “As for those who devour interest, they behave as the one whom Satan has confounded with his touch. Seized in this state they say: ‘Trade is but a kind of interest’, even though Allah has made trade lawful, and interest unlawful”.   Keynes (1930, p. 368) picked up such wisdom of the inverse relationship between trade and interest and wrote, “The strenuous purposeful moneymakers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.”   Such are the messages of moral highness and wisdom picked up in this paper. The fundamental point here is to establish the fact that the only way of phasing out interest rate from Islamic activities is to understand and implement the formalism of the inverse relationship that permanently exists between trade in the good things of life and the rate of interest as the impediment to the free flow of resources into such tradable activities.   The central bank and commercial banks and fi nancial intermediaries as practitioners must understand this organic relational concept of intellection in relation to money and the real economy. The monetary system and the real economy with the financial instruments between would thus be shown to formalize the intellection paradigm – which indeed is a truly scientific revolution. The result is replacement of the fractional reserve requirement monetary system by the 100 per cent reserve requirement monetary system backed by the gold standard. Likewise, the organic relationships of such a monetary arrangement including its monetary policy and transmission mechanism would structurally change the nature of markets and its institutional relations and individual preferences. The result at the end will be a phased down interest rate regime into a trade-related one by the rise of the tradable relationships that are generated. The foundational methodology that enters this kind of organically relational worldview with the episteme of unity of knowledge (the divine law in Islam) provides the functional ontology of the socially and morally constructed money, production and real economy circular causation. It models the legitimacy of trade as the resource mobilization instrument, while rejecting interest as the permanent impediment of resource mobilization.   Keywords: Monetary economics, Islamic economics and finance, Islamic political economy and world-system, social economics, ethics and economics.

Dynamic interactions between stock markets and the real economy

2016 ◽  
Vol 11 (4) ◽  
pp. 715-746 ◽  
Author(s):  
Nikiforos T. Laopodis ◽  
Andreas Papastamou
Keyword(s):  
Economic Development ◽  
Stock Market ◽  
Methodological Approach ◽  
Financial System ◽  
Cointegration Analysis ◽  
Policy Implications ◽  
Real Economy ◽  
Dynamic Interactions ◽  
Content Type ◽  
The Real

Purpose The purpose of this paper is to re-examine the relationship between a country’s aggregate stock market and general economic development for 14 emerging economies for the period from 1995 to 2014. Design/methodology/approach The methodological approach of the paper is multifold. First, the authors use cointegration analysis to determine the simple dynamics among the variables. Second, the authors utilize vector autoregression analysis to study the dynamics among the variables for the 14 countries. Third, the authors employ panel analysis to determine common variations among the variables and across countries. Findings When examining the linkage between the stock market and economic development, proxied by gross domestic product growth or with gross fixed capital formation growth, the authors did not find a meaningful relationship between them. However, when the authors included additional control variables strong, dynamic interactions between the two magnitudes surfaced. Specifically, it was found that the stock market is positively and robustly correlated with contemporaneous and future real economic development and, thus, it directly contributed to a country’s economic development either through the production of goods and services or the accumulation of real capital. Thus, it can be inferred that the stock market alone is not capable of boosting economic development in these countries unless being part of a comprehensive financial system (which includes banks) as well as investment in real capital. Research limitations/implications The policy implications are clear. Government authorities must recognize that the stock market alone is not a driver of economic development and that a sound, efficient financial system (which includes banks) must be present in order to contribute and foster economic development. Originality/value The study is original in the sense that it examines various financial and economic variables to determine the degree of (or dynamic interactions among) the stock market and the real economy for each and all emerging markets in the sample.

Unlocking the value of HR to drive a change-ready culture

2017 ◽  
Vol 16 (4) ◽  
pp. 171-176
Author(s):  
Campbell Macpherson
Keyword(s):  
Real World ◽  
Culture Change ◽  
Design Methodology ◽  
Lessons Learned ◽  
World Culture ◽  
Content Type ◽  
Large Organization ◽  
The Real ◽  
Personal Experiences

Purpose This paper aims to present a case study focused on developing a change-ready culture within a large organization. Design/methodology/approach This paper is based on personal experiences gleaned while driving an organization-wide culture change program throughout a major financial advisory firm. Findings This paper details over a dozen key lessons learned while transforming the HR department from a fragmented, ineffective, reclusive and disrespected department into one that was competent, knowledgeable, enabling and a leader of change. Originality/value Drawing on the real-world culture change intervention detailed here, including results and lessons learned, other organizations can apply similar approaches in their own organizations – hopefully to similar effect.

Real effects of real estate: evidence from unemployment rates

2020 ◽  
Vol 37 (4) ◽  
pp. 605-623
Author(s):  
Can Dogan ◽  
John Can Topuz
Keyword(s):  
Real Estate ◽  
Housing Prices ◽  
Real Economy ◽  
Residential Real Estate ◽  
Content Type ◽  
Unemployment Rates ◽  
The Real ◽  
Real Estate Price ◽  
Real Effects ◽  
Real Estate Prices

Purpose This paper aims to investigate the relationship between residential real estate prices and unemployment rates at the Metropolitan Statistical Area (MSA) level. Design/methodology/approach This paper uses a long time-series of MSA-level quarterly data from 1990 to 2018. It uses an instrumental variable approach to estimate the effects of residential real estate prices on unemployment rates using the geography-based land constraints measure of Saiz (2010) as the instrument. Findings The results show that changes in residential real estate prices do not have a causal effect on unemployment rates in the same quarter. However, it takes 9-12 months for an increase (decrease) in real estate prices to decrease (increase) unemployment rates. This effect is significant during both pre- and post-financial crisis periods and robust to control for the economic characteristics of MSAs. Research limitations/implications This paper contributes to the emerging literature that studies the real effects of real estate. Particularly, the methodology and the findings can be used to investigate causal relationships between housing prices and small business development or economic growth. The findings are also of interest to policymakers and practitioners as they illustrate how and when real estate price shocks propagate to the real economy through unemployment rates. Practical implications This study’s findings have important implications for academics, policymakers and investors as they provide evidence of a snowball effect associated with shocks to real estate prices: increasing (decreasing) unemployment rates following a decrease (increase) in real estate prices exacerbates the real estate price movements and their economic consequences. Originality/value This paper analyzes a significantly longer period, from 1990 to 2018, than the existing literature. Additionally, it uses the MSA-level land unavailability measure of Saiz (2010) as an instrument to explore the effects of residential real estate prices on unemployment rates and when those effects are observed in the real economy.

Pseudohomophones as brand names

2018 ◽  
Vol 52 (9/10) ◽  
pp. 1909-1930
Author(s):  
Jasmina Ilicic ◽  
Stacey Baxter ◽  
Alicia Kulczynski
Keyword(s):  
Real World ◽  
Design Methodology ◽  
Brand Names ◽  
Brand Name ◽  
Superiority Effect ◽  
Content Type ◽  
The Real ◽  
Brand Meaning ◽  
Practical Implications

Purpose The purpose of this study is to introduce the homophone emotional interest superiority effect in phonological, or sound-based, priming, whereby pseudohomophone brand names (i.e. non-words that are pronounced identically to English words, for example, Bie) prime brand meaning associated with the member of the homophone pair that is emotionally interesting (i.e. Bie will be prime brand avoidance (purchase) when consumers are emotionally interested in the homophone bye [buy]). Design/methodology/approach Studies 1 and 2 examine the effect of homophone emotional interest on brand judgements and behaviours. Study 3 investigates the role of boredom with the brand name in attenuating the homophone emotional interest superiority effect. Findings Findings indicate that pseudohomophone brand names prime brand judgements and behaviours associated with the word from the homophone pair that evokes emotional interest. Study 2 provides further evidence of homophone emotional interest as the process influencing brand judgements and behaviours. Study 3 establishes that the effect of pseudohomophone brand names on brand judgements weaken when boredom with the brand name is induced. Research limitations/implications This study is limited, as it focuses only on fictitious brands and methodologically creates boredom in a way in which may not be typical of what would be experienced in the real world. Practical implications This study has important implications for brand managers in the development of new brand names and in prioritising the intended homophone pair from a pseudohomophone brand name to influence consumer judgements and behaviours. Originality/value This study introduces and provides evidence of a homophone emotional interest superiority effect. This study also identifies a condition under which the homophone emotional interest superiority effect is attenuated.

Send in the robots

2016 ◽  
Vol 24 (2) ◽  
pp. 141-144 ◽  
Author(s):  
Tom P. Abeles
Keyword(s):  
Artificial Intelligence ◽  
Personal Identity ◽  
Design Methodology ◽  
Well Being ◽  
Social Implications ◽  
Human Society ◽  
Content Type ◽  
Regional Basis ◽  
And Robotics

Purpose This paper aims to explore how the introduction of robots and artificial intelligence raises questions regarding the role of “work” not just in meeting societal material needs but challenges the idea of work as an underlying paradigm of human society, particularly as personal identity. Design/methodology/approach This paper takes the form of an editorial opinion piece. Findings “Work” is a defining characteristic of an individual. The entrance of robots and artificial intelligence could be a greater challenge to an individual’s sense of well-being and identity than only for filling traditional functions and basic needs of society. Social Implications The question is raised as to the psychological and social implications of the “immigration” of a new “culture” in the form of artificial intelligence and robotics beyond a local or regional basis. Originality/value The increasing presence of robots and artificial intelligence not only offers alternative ways for society to function but also sharpens the challenges that one culture faces when confronted by other communities who are able to fill traditional positions beyond the traditional one of “work”.

Examining financial needs of banking customers for product development in Islamic banking in Indonesia

2019 ◽  
Vol 12 (5) ◽  
pp. 712-726 ◽  
Author(s):  
Aimatul Yumna
Keyword(s):  
Product Development ◽  
Primary Data ◽  
Islamic Banking ◽  
Life Cycle Approach ◽  
Real Economy ◽  
Structured Interviews ◽  
Content Type ◽  
The Real ◽  
Financial Products ◽  
Qualitative Approaches

Purpose This study aims at product development in Syariah banking, using the theory of Pyramid of Maslahah. Product development are important aspects of Islamic banking to realize Maqasid Al Shariah and to better serve the real economy. Design/methodology/approach To understand the needs of the customers, this study uses qualitative approaches and collects primary data from semi-structured interviews of 25 banking customers in Indonesia. Findings The study found that the group of respondents who have similar characteristics in age, marital status and number of kids tend to have similar financial needs. Some of the needs that have not been fulfilled by Sharia banking are the needs for investment in banking products, the needs for pension plan products and the needs for travelling-related financial products. Practical implications This study proposed that Islamic banking should provide financial products that cater to three needs of the society, including the needs for necessities/essentials (daruriyat), the needs of complementary requirements (hajiyyat) and the needs for beautifications or embellishments (tahsiniyat), to be able to better serve the real economy. Originality/value Financial needs and the life cycle approach can be used for product development in banking industry. However, this approach has not been widely used for consideration in the development of Sharia banking products in Indonesia. This study provides some novelty in Islamic banking customer behavior, especially in understanding financial needs based on the theory of Pyramid of Maslahah.

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