Can Islamic Finance Constitute A Solution to Crisis?

Hatem DERBEL, Taoufik BOURAOUI, Neila DAMMAK

Abstract


The aim of this paper is to show that the Islamic finance is more stable than the conventional finance constituting, thus, a means to reduce the impact of financial crises. Using a VAR model for the financial indexes of France, United States, Indonesia and Saudi Arabia, we show that the effect of a shock on the American market during the period of crisis is negatively transmitted on all other markets, but with a small extent on the market using the method of Islamic financing.


Full Text: PDF DOI: 10.5539/ijef.v3n3p75

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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