Over the past three decades, the Malaysian economy has been experiencing economic growth, but at the same time inundated by a deterioration of overall fiscal balance and consequently a rise in national debt. On the back of sluggish global economic condition and tight fiscal space, the Malaysian economy will need to grow by a stable and rapid rate over the next few years and achieve fiscal sustainability. Currently, macroeconomic policies in Malaysia follow the conventional model based on the risk-transfer paradigm. Over the next decade, the potential for risk sharing as an alternative to risk transfer is expected to grow rapidly. Risk sharing is also the essence of Islamic finance.
Using quantitative method, this book will model the Malaysian economy based on fiscal policy that applies the fundamental principle of Islamic finance, to demonstrate its benefits in spurring growth, promoting distributive justice, rendering the economy more stable, enhancing fiscal governance and improving financial inclusion.
The book is of interest to policy makers, researchers, ministries of finance, and students interested in alternative economic paradigms.