Journal of Iran's Economic Essays; an Islamic approach
Year:2014 | Volume:10 | Issue:20|Papers Count:10

Money is one of the most challenging concepts in economics about which economists have always had serious disputes with each other. During the history of economics development, all different schools of thought have tried to explore the true meaning of money and its real origins. It seems that one of the most important causes of having different cognition about the true meaning of money refers to the concept of endogeneity of money. This issue is an important part of the post Keynesian approach to money. Because of the necessity of studying the theoretical aspect of monetary economy in the cortex of Islamic monetary and financial system, in this paper we are going to analyze the concept of the endogeneity of money by a comparative study with other school of thoughts significantly, post Keynesian and orthodox approach to money. Based on the result of this comparative study, although, money in the Islamic approach follows the endogenous process of creation, but this process and analyzing the Islamic endogenous money is fundamentally different from the post Keynesian view.

Uncertainty about the legitimacy of speculative transaction in economic and financial markets has created widespread controversial discussions among Islamic scholars. To recognize the nature of short – run speculative financial transactions from an Islamic viewpoint, through this paper, first, the relationship of these discussions with Keynes in one hand and Gharar, Gambling and Wager in the other hand were examined. Then, this research studied the nature of Keynesianism. At last, it was tried to understand the nature of short-run speculative transactions from an Islamic point of view conceptually and analytically.The results showed that all short-run financial transactions that strongly have the nature of zero or negative sum games are not illegal. These transactions have a betting nature via unusual normal risk. We have frequently experienced them in exchange markets. It also revealed that it is not obligatory for entering the betting activities based only on chance according to jurisprudential principles. Entering such activities with prediction and estimation does not make them eligible. It was finally concluded that disregarding the doubt about being Keynesian concerning the short-run speculative transactions, these transactions can be considered as the instances of Gharar and betting.

Justice as the most controversial phenomenon in human thought is a multi-dimensional truth. Income distribution, fairness and entitlement are recognized the most significant aspects of justice. Each society's understanding of these concepts has important effects on labor, goods and services markets as well as on the distribution of income and wealth, redistribution policies and expectations of the societies from governments. This study attempted to investigate these concepts in participants' behavior by the means of four economic experiments (via random sampling of the students of Mazandaran University). Results showed the collusion in the state of group decision – making to increase the sharing of profits of the joint account. That decision-maker is not benefitted causes greater attention to efficiency. Confirming the existence of positive y-intercept in the distribution function represents the attention to the payment of basic rights for those who are not deserved. Allocation of income in the situation of mutual recognition and group decision-making increases with the maximization of the share in production, but this relationship is not a one to one relationship. In addition to verifying impact of merits on the distributing decisions, the results showed that important variables other than the situation of decision – making (in the game) are affecting the decisions of the players such as family income, gender and actual earnings.

Economics like other sciences needs to solve «the problem of induction» as a methodological problem to become an experimental science. The founders of the paradigm of econometrics were to resolve the problem by the theories of «probability and statistical inference». The present paper tried to show that the paradigm of econometrics failed to achieve this aim. Not compatible with what the founders of the paradigm of econometrics thought which this problem can only be solved by technical reasons based on probability and statistics, the present paper tried to show that this failure has arisen from a methodological reason, not solving the problem of induction, which itself originated from an epistemological problem, the problem of causation. To support this claim, it attempted to demonstrate that the paradigm of econometrics, in spite of its varying techniques, was concentrated on the Humean conception of causality which failed to solve the problem of induction. The solution for changing methodology was laid in epistemological considerations, not only in varying statistical techniques. Most criticisms concerning econometrics have not paid enough attention to this controversial point and focused on statistical techniques. This failure will challenge the claim of the paradigm of econometrics on the scientific policy-making in economics.

Stockholders for making proper investment decisions need information which assists them in making the best decision. Among available information, Information related to the per share forecasted earnings is the important ones in the user’s opinions. Beside, companies try to forecast the earnings per share with maximum accuracy to attract investors. Accordingly, the present study seeks to provide a model to improve earnings per share forecast of companies listed in Tehran Stock Exchange (TSE) using modern artificial neural networks approaches. For this purpose, first the factors affecting future earnings per share were inferred from internal and external research, then using the sample companies'' financial information in the years 2005-2012 and employing support vector machines and artificial neural networks methods, earnings per share forecasting was designed. Support vector machines model was able to forecast the sample companies’ next year’s earnings per share with an adequate error of 5%. This model introduces current year’s earnings per share with effective coefficient of 25% as most effective variable to forecast next year’s earnings per share. The results suggested that the support vector machines model has similar performance in comparison with artificial neural networks model.

This research aimed to investigate the public and private institutions in Iran and compared its situation with the countries have been mentioned in Iran’s 1404 vision statement so that it can suggest strategies which lead to move the country toward economic development while standing as the first country in the region according to its 20-year national vision. The main focus in this research was put on “institutions” in different pillars of competitiveness to determine the weight of each institution''s index using 2013-2014 Global Competitiveness Report and Shanon Entropy method. After that we adopted TOPSIS method to prioritize regional countries based on institutions and chose the best country to benchmark in each index. Whereas global competitiveness report ranked countries with same weight, in the next step aggregate method was used to find the final ranking of each country. Finally, based on Importance-Performance Matrix, “intellectual property protection”, «corruption and embezzlement», “diversion of public funds” , “wastefulness of government spending”, “public trust in politicians”, and “favoritism in decisions of government officials”, were identified as the first priorities for improving “Institutions” in Iran. The result of this research can be used as guidance for Iranian policy makers in order to develop institutions and implementation of policy and executive prioritizing which can serve Iran to achieve competitive advantage between regional countries.

Undoubtedly, banks are authorized to use the deposit investments in exchange or participation based contracts. From the jurisprudential – legal point of view these contracts relate to exchange and participation based contracts rather than the mechanism for the determination of interest rate. For instance, the sale on installment outlines the framework of the contract and nor the mechanism of the determination of this contract''s interest rate. The contract interest rate may be determined independently from the interest rate or usury rate determined in the actual economy, as it may be possible to derive the interest rate of this contract from the usury rate or interest rate in real economy. If the interest rate of this kind of contract is derived from the usury rate, no lawyer or jurist cannot criticize the installment buying and selling which its rate is derived from the interest rate and invalidate the transaction as well as economists cannot accept that such an interest rate is moving away from the actual interest rate. In fact, the economic problems should not be offered to jurisprudence to find jurisprudential solutions, but, there exists economic solutions to economic problems. Here, finding an underlying mechanism for determination of interest rate in all the exchange and participation based contracts is identified as an economic problem. That some economists have presented the solutions for these economic problems was discussed in this paper.