Publication: Measuring the size of output gap in sukuk issuing OIC member countries
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Date
2015
Journal Title
Journal ISSN
Volume Title
Publisher
Mediterranean Center of Social and Educational Research
Abstract
The aim of this study is to estimate the size of output gaps for sukuk issuing Organization of Islamic Cooperation (OIC) member countries. The output gap is measured based on univariate Hodrick-Prescott (HP) filter for the period 1980 until 2011. Data are sourced from the World Economic Outlook and SESRIC databases. The findings reveal that Bahrain, Pakistan and Malaysia have smooth trend between real GDP and its trends. Most countries display fewer fluctuations in business cycles and changes in inflation during mid-2000s. The results suggest that output gap estimations contain key information for monetary policy since the estimate of output gap can contribute towards identifying and assessing the effectiveness of monetary policy framework over time. For cross-border sukuk issuance, the ability to sustain economic growth in the long run without inducing inflation will boost investors� confidence. � 2015, Mediterranean Center of Social and Educational Research. All rights reserved.
Description
Keywords
HP filter, Inflation, Islamic finance, OIC economies, Output gap, Sukuk