This paper attempts to present a viable approach for the design of an instrument of government finance (and monetary management) in an Islamic economy where conventional transactions based on an ex-ante promise of a risk-free rate of return are forbidden. Resources to finance government infrastructural and development projects can be mobilized through the issuance of a national participation paper (NPP) and this instrument can also serve as an instrument of monetary management. Various conceptional issues underpinning the introduction of such an instrument and methods of calculating a corresponding rate of return are discussed In principle, this approach has been accepted in Iran.
CITATION STYLE
International Monetary Fund. (1998). The Design of Instruments for Government Finance in an Islamic Economy. IMF Working Papers, 98(54), 1. https://doi.org/10.5089/9781451847482.001
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