Ahamed Kameel Mydin Meera, Ahamed Kameel
IIUM Institute of Islamic Banking and Finance, Kuala Lumpur, Malaysia

Published : 2 Documents

Found 2 Documents

An Analysis of Yusuf (AS)s Counter-Cyclical Principle and its Implementation in the Modern World Ahmed, Jameel; Mydin Meera, Ahamed Kameel; Collins, Patrick
Tazkia Islamic Finance and Business Review Vol 7, No 2 (2012)
Publisher : Institute for Research and Community Empowerment (LPPM TAZKIA)

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (1215.942 KB)


Objective - This study examines the present-day implementation of the counter-cyclical principle suggested by Yusuf (AS) around four thousand years ago, in response to the King of Egypts dream, to overcome the famine of seven years through saving grain during seven years of abundance. In general, the counter-cyclical principle encourages saving during times of plenty and spending during times of scarcity, activities which today help to stabilise the business-cycle.Method - Library research is applied since this paper relies on secondary data by thoroughly reviewing the most relevant literature. This paper reviews the commodity-based currency systems proposed before, during and after the Second World War by several prominent economists (particularly Keynes, 1938; Graham, 1940; Hayek, 1943; Grondona, 1950 and Lietaer, 2001) all of which basically incorporated the counter-cyclical principle of Prophet Yusuf (AS). The primary purpose of these commodity-based currency systems is to stabilise the real value of money in order to improve macroeconomic stability. Additionally, this paper provides an in-depth analysis of Grondona system of conditional currency convertibility.Results - The Grondona system would partially stabilise the real value of each countrys national currency in terms of a range of durable, essential, basic imported commodities, thereby also partially stabilising the prices of the selected commodities in terms of the national currency of each country implementing the system.Conclusion - The Grondona system of conditional currency convertibility as compared to other commodity-based currency systems is more practical. Its primary advantage in comparison to other proposals of commodity reserve currency is that it could be implemented in parallel with the existing monetary system. Accordingly, it could be taken as a preliminary step towards a monetary system based on real money such as gold dinar.Keywords : Counter-cyclical principle; Grondona system; Commodity-based currency system (s).
Journal of Islamic Monetary Economics and Finance Vol 1 No 1 (2015): AUGUST
Publisher : Bank Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (4466.619 KB) | DOI: 10.21098/jimf.v1i1.482


This article is a theoretical article that attempts to clarify the inherent meanings of the concepts of profit and interest, i.e. two important concepts in finance, particularly Islamic Finance. These are age-old concepts in economics that still draw confusion among people. Profit comes from trade and interest comes from lending and borrowing activities. While the former is much encouraged in Islam, the latter is strongly forbidden. Nonetheless, in today‚Äôs monetary and financial circumstances, the market interest rate is being used as a benchmark for the Islamic profit rate, drawing criticisms from many quarters that both are indeed one and the same. Using the fundamental economic concept of marginal utility, this paper attempts to clarify the fundamental difference in these two concepts and their implications for modern finance, particularly Islamic finance. Indirectly in the process, the paper also clarifies the concepts of money and riba.