Abstract
Risk sharing is the organizing principle of Islamic economics and finance that promotes financial inclusion, development, and distributive justice. The use of risk-sharing instruments is the distinctive feature of the Islamic financial and economic system. An Islamic economic system is a market-based system with rules of behavior and clear rule-enforcement mechanisms to reduce uncertainty in transactions and to ensure an efficient operation. It emphasizes on social and moral values, priority of the rights of society, trustee-stewardship role of man on worldly resources, recognition and preservation of human dignity, immutability of property rights, and achievement of broader concept of development beyond physical growth. Islamic microeconomic policy tools rely on the risk-sharing features of equity finance as an alternative to reliance on interest rate-based instruments.
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Othman, A., Mat Sari, N., Alhabshi, S., Mirakhor, A. (2017). Islamic Finance, Risk Sharing, and Macroeconomic Policies. In: Macroeconomic Policy and Islamic Finance in Malaysia. Financial Institutions, Reforms, and Policies in Muslim Countries. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-53159-9_4
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DOI: https://doi.org/10.1057/978-1-137-53159-9_4
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