Call for Papers - Special Issue on Islamic Economics and Finance

Guest Editors:

M. Kabir Hassan, University of New Orleans

Submission Deadline: August 1, 2020

Publication Deadline: April 1, 2021

The fundamental purpose of Islamic economics is to examine and understand economic problems with an Islamic view in mind so that these problems may be solved in ways that are in accordance with the principles of Islam. Conventional economics is a secular discipline that emphasizes the material, whereas Islamic economics has an ethical and moral component and places great importance on the spiritual. Standard economic theory holds that an economic agent is simply an assemblage of preferences (tastes, actions, attitudes, and laws) that modulates its behavior according to cost/benefit analysis. In the Islamic view, however, human beings are a bit more complicated. They are imbued with a moral and ethical dimension. They are servants and vice-regents of God on earth and as such, their actions must adhere to the model laid out in shari’ah.

Accordingly, the Islamic view of economic agents is more complex than that of standard economic theory. Islamic economics replaces the rational actor of conventional economics with the faithful actor who pursues personal interests only within communal norms and in furtherance of communal interests. The economic interests of each individual must be subsumed into the economic interests of society as a whole. In this way, every individual in a community has the same freedoms and opportunities. Islamic economics encourages economic activity, but on the condition that it be both financially and socially beneficial. Islam seeks to organically change the economic behavior of market participants from within. When the constituent parts of the market act ethically, the whole market will have a more ethical foundation and will thus serve the spiritual needs of society in additional to its material needs.

This special issue seeks to evaluate how well Islamic economic institutions have reached their stated goals. To do so reliably, the focus must necessarily be on empirical studies. While concepts and formulae are undoubtedly important, testing and measuring offer stronger evidence that can be used as a guiding light for the way forward. Four recent trends demonstrate the relevance of this special issue. First, according to a Pew Forum on Religion and Public Life report, 1.57 billion people, or nearly 1 in 4 in the world, are Muslim. Second, the growth of universities in Muslim countries along with the expanding interest in Islamic thought in Western universities have created an attentive audience receptive to Islamic economics. Third, the Islamic financial industry performed well during the global financial crisis. The Islamic financial industry nearly doubled from 2007 to 2010, a period when most conventional banks were struggling. The fact that no Islamic banks needed to be bailed out by taxpayer money is a testament to the resilience of the Islamic financial model. Finally, it is imperative that the principles of Islamic economics be put to the test. Some crucial questions must be answered. In a global business environment largely unsympathetic to the Islamic model, how well have religious-based values translated into actual performance? Is following the Islamic model a hindrance to financial institutions, or is there evidence that it can be economically and spiritually rewarding?  These are questions that must be answered using modern empirical methods.

Potential Topics:

  • Role of Islamic socio-economic institutions in economic development 
  • Perspective of Islamic economics and finance, including its critique 
  • Ethics and morality in Islamic economics and finance 
  • The economics of corruption in the Muslim world 
  • The global financial crisis, European sovereign debt crisis and COVID-19 crisis and Islamic finance 
  • Modern Monetary Theory and Islamic Finance
  • Efficiency and performance of Islamic financial institutions 
  • Why do Islamic financial intermediaries exist?
  • Effect of Islamic financing announcements on firm value 
  • Long-run impact of Islamic bank distress on firm performance 
  • Measuring banking competition and market power in Islamic finance 
  • Financier-borrower relationship, asymmetric information, and switching costs in Islamic finance
  • Determinants of characteristics of bank relationships in Islamic finance 
  • Equilibrium and rationing in Islamic credit markets 
  • Banks, financial markets, and macroeconomic growth and Muslim World
  • Role of formal and informal institutions in implementing reforms in the Muslim world 
  • Institutions, social order, and the political economy of the Muslim world 
  • Islamic financial product development, innovation and financial engineering
  • Monetary policy and financial stability in Islamic banking and finance
  • Credit channel of monetary policy and Islamic finance
  • Benefits and costs of low monetary policy rates in Islam Banking
  • Critiques of full reserve banking and fractional reserve banking and Islamic finance
  • Transmission of monetary policy through Islamic banks
  • Monetary policy and central banking function from an Islamic economics perspective
  • Macro-prudential and micro-prudential policies for Islamic financial institutions 
  • Credit booms, financial crises, and Islamic finance 
  • Islamic Social Finance
  • New models for Islamic microfinance and their comparative analysis 
  • Economics of social networks and their significance in Islamic microfinance 
  • Risk management and liquidity risk management instruments for Islamic banks
  • Basel III, G20 reform agenda, IFSB and AAOIFI standards on Islamic financial services industry 
  • Impact Investing and Islamic Finance
  • Current and Future status of Islamic economics, banking and finance research and education
  • An assessment of Islamic economics and finance writings in international peer-reviewed journals 
  • Mathematics and valuation of Islamic financial instruments 
  • Islamic financial product engineering and Riba concealment
  • Establishing alternative pricing and valuation benchmarks for Islamic finance 
  • Enhancing quantitative risk management capabilities of Islamic financial institutions