Can Islamic Financing Ease in Monetary Policy Uncertainty – A Proposal for Islamic Monetary Policy
Article Sidebar
Main Article Content
Abstract
Purpose: The impact of monetary policy uncertainty in Pakistan on economic conditions, financial markets, and investor confidence is substantial. Historically, the conventional monetary system has failed to manage inflation, which has led to an uncertain monetary policy environment. The primary objective of this document is to offer a comprehensive analysis of monetary policy uncertainty determinants using the quadratic function of Islamic financing.
Methods: The bound-testing ARDL assessment confirmed a U-shaped effect of overall producer and consumer financing on uncertainty.
Findings: The results highlight that Islamic financing management can help reduce monetary policy uncertainty while increasing production can assist in exacting gains from Islamic financial development for monetary policy effectiveness.
Originality/Value: This study is instrumental in highlighting the ability of the Islamic financial system to reduce monetary policy uncertainty.
Article Details
Section
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Authors retain copyright of their work.
By submitting to JIBEP, authors grant the Journal of Islamic Banking, Economics and Policy a non-exclusive license to publish, distribute, and archive the article in print and electronic formats.
Authors are free to reuse and distribute their work after publication, provided that proper citation to the original publication in JIBEP is given.
By submitting, authors confirm that:
- The work is original and has not been published elsewhere.
- All co-authors consent to the submission.
- Any necessary permissions for figures, datasets, or third-party material have been obtained.
JIBEP supports open access and promotes wide dissemination of published research under fair use principles.