Journal of King Abdulaziz University-islamic Economics 

About: Journal of King Abdulaziz University-islamic Economics is an academic journal. The journal publishes majorly in the area(s): Islam & Islamic economics. It has an ISSN identifier of 7383-1018. Over the lifetime, 355 publications have been published receiving 2906 citations.

The Financial System and Monetary Policy in an Islamic Economy

Abstract: The main characteristics of an Islamic financial system are described relying on recent writings on the subject and on the actual practice of Islamic banking. A theoretical model of an Islamic economic system is developed by generalizing the standard IS-LM model in order to study the effects of monetary policy on the macro- economic variables of an Islamic economy. Whether the authorities attempt to influence monetary conditions through changing the money supply or use the flow of Mudarabah financing as an intermediate objective, there would be no fundamental change in the way monetary policy affects economic variables. An expansionary monetary policy would reduce rates of return and increase output.

Stock Market Volatility Transmission in Malaysia: Islamic Versus Conventional Stock Market

Abstract: This study attempts to explore the extent to which the conditional volatilities of both conventional and Islamic stock markets in Malaysia are related to the conditional volatility of monetary policy variables Among the monetary policy variables tested in the study are the narrow money supply (M1), the broad money supply (M2), interest rates (TBR), exchange rate (MYR), and Industrial Production Index (IPI), while the Kuala Lumpur Composite Index (KLCI) and Rashid Hussain Berhad Islamic Index (RHBII) are used as measures for conventional and Islamic stock markets, respectively In order to capture the international influence on both stock markets, the volatility in the US monetary policy variable measured by the Federal Funds Rate (FFR) is incorporated into the study Unlike our earlier study (Mohd Yusof and Abd Majid, 2006) that employed the Generalized Autoregressive Conditional Heteroskedasticity (GARCH)-M, GARCH (1,1) framework together with Vector Autoregressive (VAR) analysis are employed for the monthly data starting from January 1992 to December 2000 in this study The study finds that interest rate volatility affects the conventional stock market volatility but not the Islamic stock market volatility This highlights the tenet of Islamic principles that the interest rate is not a significant variable in explaining stock market volatility Our finding provides further support that stabilizing interest rate would have insignificant impact on the volatility of the Islamic stock markets

A Comparative Study of Zakah and Modern Taxation

Abstract: This paper critically discusses the concept of zakah and taxation. The main objective of the paper is, first, to compare and contrast zakah and taxation, especially on the legal, economic, social, ethical and spiritual aspects. Secondly, the paper aims to examine issues related to the implementation of zakah in modern time by reviewing the practices of zakah and taxation in the early Islamic period and exploring the issues in the context of Malaysia. The paper indicates that zakah greatly differs from the taxation system. Zakah aims not only to achieve religious merit but also to become part of the modern state fiscal policies and share a greater role in removing inequalities in the society. The paper argues that there may be lack of proper implementation of zakah in Muslim countries which limits the success of the noble aims of zakah. Finally, the paper indicates the urgent need for education and political will of modern governments to ensure the success and survival of zakah.