Term Interest Research Articles

الترجيح بالمصلحة وأثره في فتاوى الزکاة المعاصرة دراسة فقهية مقارنة

الترجيح بالمصلحة وأثره في فتاوى الزکاة المعاصرة دراسة فقهية مقارنة محمود محمد بهجت عبد الرحمن محمد قسم الشريعة الإسلامية، کلية دار العلوم، جامعة المنيا، المنيا، مصر. البريد الالکترونى: mahmoudmbahgat@mu.edu.eg ملخص البحث: فالمصلحة مصطلح مشهور في المعجم الفقهي المستخدم لدي الفقهاء والأصوليين، فکتب الفقهاء وعلماء الأصول زاخرة بلفظ المصلحة تعريفا ، وتحديدا، وبيانا للأثر المترتب عليها. غير أن ما ينبغي الإشارة إليه في نظر الباحث هو بيان أثر مصطلح المصلحة في المستجدات الفقهية المعاصرة. فرعاية المصلحة أضحت رکن لا يمکن إنکار أثره في العديد من قضايا النوازل المعاصرة، إذ إن کثيرا من فتاوى المفتين تبنى على المصلحة، سواء أکانت المصلحة هي سنده ومقصده الأساسي في بناء الحکم الفقهي، أم عاملا مؤثرا من عوامل أخر. ويهدف هذا البحث إلي بيان دور المؤسسات الشرعية في تکييف قضايا النوازل المستجدة في فقه الزکاة ارتکازا إلي ما تقتضيه المصلحة، وبما يرجع نفعه على المجتمع ، وبيان الرأي الراجح في هذه النوازل . وسوف أقوم بإتباع المنهج الاستقرائي التحليلي المقارن من خلال استقراء فتاوى الهيئات الفقهية، وسأقتصر في ذلک على فتاوى دار الإفتاء المصرية، والمجمع الفقهي باعتبارهما مؤسستين ذات مرجعية فقهية وسطية مجمع على آرائهما لدي جموع المسلمين. وأخيرا يمکننا القول بأن الهيئات الفقهية التزمت منهجا وسطيا لاعتماد الفتوي، وقامت باعتماد الترجيح بالمصلحة أصلا أصيلا من ضمن هذا المنهج، حيث أنها تستأنس بآراء الفقهاء، وترجح قوة ما يقتضي ترجيحه لشدة الحاجة إليه، أو لمصلحة الناس في فتاوي الزکاة وفي کثير من القضايا کجواز إخراج الزکاة علي المستشفيات والمشاريع الخيرية وغيرها من القضايا. الکلمات المفتاحية: النظر المصلحي- المصلحة- الترجيح- الزکاة المعاصرة - مستجدات الزکاة . Page BreakInterest Outweighing Other Considerations and its Effect on Contemporary Fatwas of Zakat: A Comparative Juristic Study Mahmoud Mohammed Bahgat Abd Elrahman. Jurisprudence Deoartment, Faculty of Dar Al Uloom, Cairo University, Cairo, Egypt.‏ Abstract: Maslaha is a well-known term in the fiqhi lexicon used by the jurists and fundamentalists, so the books of jurists and scholars of origins are rich in the term “interest” in definition, specificity and an explanation of the impact thereof. However, what should be indicated in the researcher's view is an explanation of the effect of the term (interest) on contemporary jurisprudential developments. Taking care of interest has become an undeniable pillar whose impact on many contemporary issues of conflict, as many of the fatwas of the muftis are based on interest, whether the interest is his support and his primary purpose in building jurisprudential judgment, or an influential factor among other factors. Zakat is an essential pillar of our true religion. It brings the servant closer to his Lord, and it is one of the paths of piety. And since the jurisprudential institutions fulfill their original and supreme duty to explain the jurisprudential rulings, these contemporary bodies and scholars have issued fatwas on issues related to Zakat. Therefore, I thought that in this research I would collect fatwas based on the implementation of interest in contemporary fatwas on Zakat and compare them with the sayings of the jurists Keywords: Reformed consideration , interest , weighting ,contemporary zakat, developments in zakat.

Volatility forecast of CIDC Construction Cost Index using smoothing techniques and machine learning

AbstractThe Construction Industry Development Council (CIDC) of India has been calculating and publishing the Construction Cost Index (CCI), monthly, since 1998. Construction cost variations interrogate different kinds of projects such as roads, power plants, buildings, industrial structures, railways and bridges. The success rate of completion of construction project is diminished due to the lack of prediction knowledge in CCI. Predicting CCI in greater accuracy is quite difficult for contractor and academicians. The following factors are influenced higher in CCI such as population, unemployment rate, consumer price index (CPI), long term interest rate, domestic credit growth, Gross Domestic Product (GDP) and money supply (M4). CCI can be used to forecast the construction cost. The relevant resource data was collected across the nation between 2003 and 2018. As outcome-based, non-econometric tools such as smoothing techniques, artificial neural network (ANN) and support vector machines (SVMs) have produced a better outcome. Among these, smoothing techniques have given the notable low error and high accuracy. This accuracy has measured by Mean Absolute Percentage Error (MAPE), Mean Square Error (MSE) and Root Mean Square Error (RMSE). The major objective of this research is to help the cost estimator to avoid underestimation and overestimation.

Bayesian Estimation of CIR Model

This article concerns the Bayesian estimation of interest rate models based on Euler-Maruyama approximation. Assume the short term interest rate follows the CIR model, an iterative method of Bayesian estimation is proposed. Markov Chain Monte Carlo simulation based on Gibbs sampler is used for the posterior estimation of the parameters. The maximum A-posteriori estimation using the genetic algorithm is employed for finding the Bayesian estimates of the parameters. The method and the algorithm are calibrated with the historical data of US Treasury bills.

Time Series Dynamics of Short Term Interest Rates in Turkey

Interest rate functions as the cornerstone for the heavy majority of the financial models. The high volatility in interest rates in the financial crisis of 2008/09 and resulting increased uncertainty led many researchers to focus on modeling the dynamics of changes in short term interest rates. This study aims to analyze the volatility of short-term interest rate in Turkey in terms of overnight repo rate and to forecast this rate for the next six months by modelling this volatility. For this purpose, the ARCH family models like ARCH, GARCH and EGARCH were preferred to use since they are the most common methods in the literature. Using the weekly frequency data for the period of January 2002 - January 2021, the model that best describes the stochastic volatility in the data was found to be the GARCH (1.1) model. As a result of the fact that the in-sample estimates were found sufficient, the interest rate estimates for the next 6 months were realized.

The Gauss2++ model: a comparison of different measure change specifications for a consistent risk neutral and real world calibration

Especially in the insurance industry interest rate models play a crucial role, e.g. to calculate the insurance company’s liabilities, performance scenarios or risk measures. A prominant candidate is the 2-Additive-Factor Gaussian Model (Gauss2++ model)—in a different representation also known as the 2-Factor Hull-White model. In this paper, we propose a framework to estimate the model such that it can be applied under the risk neutral and the real world measure in a consistent manner. We first show that any time-dependent function can be used to specify the change of measure without loosing the analytic tractability of, e.g. zero-coupon bond prices in both worlds. We further propose two candidates, which are easy to calibrate: a step and a linear function. They represent two variants of our framework and distinguish between a short and a long term risk premium, which allows to regularize the interest rates in the long horizon. We apply both variants to historical data and show that they indeed produce realistic and much more stable long term interest rate forecast than the usage of a constant function, which is a popular choice in the industry. This stability over time would translate to performance scenarios of, e.g. interest rate sensitive fonds and risk measures.

Monetary policy surprises and exchange rate behavior

Central banks unexpectedly tightening policy rates often observe the exchange value of their currency depreciate, rather than appreciate as predicted by standard models. We document this for Fed and ECB policy days using event studies and ask whether an information effect, where the public attributes the policy surprise to an unobserved state of the economy, may explain the abnormality. It turns out that many informational assumptions make a standard two-country New Keynesian model match this behavior. To identify the particular mechanism, we condition on multiple asset prices in the event study and model implications for these. We find that there is heterogeneity in this dimension in the event study and no model with a single regime can match the evidence. Further, even after conditioning on possible information effects driving longer term interest rates, there appear to be other drivers of exchange rates. Our results show that existing models have a long way to go in reconciling event study analysis with model-based mechanisms of asset pricing.

Interest Rates and Growth of Private Domestic Investment in Kenya; Vector Autoregressive Econometric Approach

This study sought to determine the relationship between short term interest rate, long term interest rate, and private domestic investment in Kenya using time series quarterly data spanning 1997 to 2018. Vector autoregressive model was used to estimate the relationship. The findings show that the central bank rate and lending rate significantly impact private domestic investment. The results emphasize the role of interest rate policy and monetary policy in driving domestic private investment in Kenya. The findings of this study will be of benefit to policy makers through provision of data-based evidence that will be used as a guide while making appropriate policies to encourage growth of private domestic investment in the country leading to economic growth.

Testing Uncovered Interest Rate Parity for Pakistan

This paper provides direct empirical assessment of Uncovered Interest Rate Parity (UIP) for Pakistan. To Test UIP, wide range of maturities have been used and for estimation purpose, we used Johansen cointegration and Dynamic Ordinary Least Square (DOLS). We find that UIP does not hold for short to medium term maturities. However for the long term maturities i.e., 10-year, the result showes that the UIP holds. It means the exchange rate is better predicted by the long term interest rates. These findings suggest that the interventions in the foreign exchange market distort the price discovery mechanism of the foreign currency in the short to medium term. In the long run, however, the market fundamentals dictate the price discovery guiding the exchange rate to converge to its long run equilibrium. Keywords: UIP, Johansen Cointegration, DOLS, Foreign Exchange Market, Price Discovery Mechanism.

Does Unconventional Monetary Policy Affect Bank Profitability in the Euro Area?

This paper investigates the impact of unconventional monetary policy (UMP) on bank profitability in the euro area, over the period 2007-2019.In particular, through multiple regression models, we analyze the relationship between the UMP variables (Longer-term refinancing operations and Securities held for monetary policy purposes) and the main bank profitability variables used in the literature (Return on average equity, Return on average assets and Net interest margin).This work is original compared to recent studies on the subject as it considers the impact of UMP expressed in terms of volumes rather than in terms of interest rates on bank profitability variables.Our results suggest that the UMP adopted by the Eurosystem over the period considered is negatively associated with bank profitability expressed by the Return on average equity and the Return on average asset. By contrast, monetary policy measures do not seem to have had any effect on the Net interest margin.

Unconventional US Monetary Policy: Impact on the Indian Economy

This article examines the impact of the US Quantitative Easing (QE) on the Indian economy. Against the backdrop of indications of economic slowdown worldwide and developing countries lowering the interest rates and restarting the treasury purchases, it aims to understand the influence US QE had on Indian economy and how it will impact way forward. Macroeconomic variables pertaining to India and the USA were examined from September 2008 to June 2019 (fortnightly data) using the vector error correction method model. It was found that the influence of the US monetary base on the Indian money supply was far more as compared to the US policy rate. Overall, the impact of QE on the Indian economy has not been as large as on the other economies of the world due to regular RBI intervention in terms of interest rates, exchange rates and other active monetary policy measures. JEL Classification Codes: E44, E52, E58, F32, O16

THE CHALLENGE OF CONTEXTUALITY

Why the wide-spread interest in contextuality, also and especially in dealing with biblical material? Is this the latest fad every self-respecting exegete is supposed to master in order to impress his or her peers? Is it merely a short term interest, without any lasting theological or hermeneutical significance?The concept of contextuality certainly can be pursued for the wrong reasons. It could therefore be helpful to place this specific interest against a wider backdrop. As this has been done in more detail elsewhere (cf Lategan 1993), only a very brief outline is offered here to show how contextuality forms part of a much wider and longer development in the interpretation of biblical material.

CREATION AND USE OF THE YIELD CURVE ON THE BANJA LUKA STOCK EXCHANGE

There has been a lot of talks lately about falling interest rates in all markets. The decline in interest rates is also evident in the domestic market. Such information and trends increase caution, especially in the corporate sector, which is not conducive to economic optimism. In support of the black premonitions that have been pointed out recently, the paper also highlights the appearance of “inverse” yield curves on the Banja Luka Stock Exchange. The yield curve represents the relationship between the interest rate (or loan cost) and the time to maturity of a given borrower in a given currency. By definition, there is no single yield curve that describes financing costs for all market participants. There are conventions that everyone adheres to when it comes to choosing instruments and general design principles. The interpretation of the yield curve is very complex because the yield curve takes into account investors’ expectations in terms of interest rates, but also inflation and political cycles because it is reflected as a risk premium for long-term investments. However, the details of the design methodology are characteristic of different institutional investors. The paper describes the methodology for constructing the yield curve of the Republic of Srpska. The range and limitations of using such a yield curve are then stated are also described. The subject of this paper is to create the yield curve in a domestic market and to analyze data from such views. The aim of the paper is to scientifically explain and describe the process of creating a curve for the yield of debt securities issued by the government and to analyze and interpret the data from that curve. The research question is: “Can the yield curve on the Banja Luka Stock Exchange be used behind the presentation of the yield on debt securities over the last decade?” Thus, the paper demonstrates the scope and limitations of this model while respecting the standards and specifics of business in the emerging market. The conclusion is that the yield curve on the Banja Luka Stock Exchange is a theoretical construction rather than an empirically verified fact, in contrast to the yield curve from developed markets, but that it can be used to represent the yield on debt securities and, indirectly, as an auxiliary tool in making investment decisions. Also, the yield curve of debt securities of the Republic of Srpska is a theoretical concept, but it is also noticeable in practice. Moreover, it is a desirable tool for both academia and practitioners and the general public.

A Counterfactual Economic Analysis of COVID-19 Using a Threshold Augmented Multi-Country Model

This paper develops a threshold-augmented dynamic multi-country model (TGVAR) to quantify the macroeconomic effects of COVID-19. We show that there exist threshold effects in the relationship between output growth and excess global volatility at individual country levels in a significant majority of advanced economies and in the case of several emerging markets. We then estimate a more general multi-country model augmented with these threshold effects as well as long term interest rates, oil prices, exchange rates and equity returns to perform counterfactual analyses. We distinguish common global factors from trade-related spillovers, and identify the Covid-19 shock using GDP growth forecast revisions of the IMF in 2020Q1. We account for sample uncertainty by bootstrapping the multi-country model estimated over four decades of quarterly observations. Our results show that the Covid-19 pandemic will lead to a significant fall in world output that is most likely long-lasting, with outcomes that are quite heterogenous across countries and regions. While the impact on China and other emerging Asian economies are estimated to be less severe, the United States, the United Kingdom, and several other advanced economies may experience deeper and longer-lasting effects. Non-Asian emerging markets stand out for their vulnerability. We show that no country is immune to the economic fallout of the pandemic because of global interconnections as evidenced by the case of Sweden. We also find that long-term interest rates could fall significantly below their recent lows in core advanced economies, but this does not seem to be the case in emerging markets.

A Counterfactual Economic Analysis of COVID-19 Using a Threshold Augmented Multi-County Model

This paper develops a threshold-augmented dynamic multi-country model (TGVAR) to quantify the macroeconomic effects of Covid-19. We show that there exist threshold effects in the relationship between output growth and excess global volatility at individual country levels in a significant majority of advanced economies and in the case of several emerging markets. We then estimate a more general multi-country model augmented with these threshold effects as well as long term interest rates, oil prices, exchange rates and equity returns to perform counterfactual analyses. We distinguish common global factors from trade-related spillovers, and identify the Covid-19 shock using GDP growth forecast revisions of the IMF in 2020Q1. We account for sample uncertainty by bootstrapping the multi-country model estimated over four decades of quarterly observations. Our results show that the Covid-19 pandemic will lead to a significant fall in world output that is most likely long-lasting, with outcomes that are quite heterogeneous across countries and regions. While the impact on China and other emerging Asian economies are estimated to be less severe, the United States, the United Kingdom, and several other advanced economies may experience deeper and longer-lasting effects. Non-Asian emerging markets stand out for their vulnerability. We show that no country is immune to the economic fallout of the pandemic because of global interconnections as evidenced by the case of Sweden. We also find that long-term interest rates could fall significantly below their recent lows in core advanced economies, but this does not seem to be the case in emerging markets.

Divisia monetary aggregates for a heterogeneous euro area

Since the run-up to the great recession, there has been a significant degree of heterogeneity across euro area countries both in terms of interest rates and in the composition of monetary assets. In order to account for the heterogeneity of monetary assets within and across member countries, we propose a Divisia monetary aggregate for the euro area. In line with earlier evidence obtained for the United States, our results from a panel probit analysis show that the divergence between the Divisia and the simple sum aggregate has a significant predictive content for recessions in euro area countries.

MODELING THE VOLATILITY FOR LONG TERM INTEREST RATE RETURNS IN THE NIGERIA BOND MARKET USING CONDITIONALY HETEROSCEDASTIC MODELS

Investigating the volatility of financial assets is fundamental to risk management. This study used generalized Autoregressive Conditional Heteroscedastic Volatility models to evaluate the volatility of the long term interest rate of Nigeria's financial market. We also incorporated three innovations distributions viz: the Gaussian, the student-t, and the Generalized Error Distribution (GED) in the modeling process under the maximum likelihood estimation method. The results show that GARCH (GED) is the most performing model for describing the volatility of three and twenty-year interest rate returns while TARCH (GED) is the most suitable model for describing the volatility of five and ten-year interest rate returns in Nigeria. The preferred models will help in the development of tools for effective risk management by monitoring the behavior of long term interest rates.

Drought Intensity, Future Expectations, and the Resilience of Climate Beliefs

Although past literature has suggested experience with the effects of climate change can affect people's belief in climate change, there is limited research on the duration of this outcome. If extreme events only update beliefs in the short term, there is a risk that long term investments and planning are only made in narrow windows around the events. Using a national survey of New Zealand farmers, we explore the effect of drought intensity on future climate expectations and plans for land-use change, focusing on the window of experience farmers use in planning. Results suggest farmers reference a short-term window rather than the historical record. Higher expectations of drought are also positively associated with land-conversion plans, highlighting the importance of beliefs in adaptation and planning behaviour. Climate change planning and adaptation require long term interest and investment. Our results suggest that short-term fluctuations in drought and weather can affect beliefs, so that a few good years might breed resistance to longer term investment.

To decrease or not to decrease: The impact of zero and negative interest rates on investment decisions

The suggestion to implement a negative monetary policy has divided economists and politicians. The effects of this experiment on the willingness of individuals and financial intermediaries to borrow and spend money and increase their risk are controversial. To provide insight into the debate, we provide experimental evidence revealing two important results. First, zero interest rates are more efficient than negative interest rates in terms of the impact on the willingness of individuals to borrow money and take risks. We suggest two behavioral explanations for this result. Second, we find no statistical difference between the effect that positive and negative interest rates have on the change in the allocation of risky assets in investment portfolios.

Smart Derivatives Contracting: Automating Interest Rate Swaps in the Over-the-Counter (OTC) Market with the DAML

The over-the-counter (OTC) market sees the majority of trading volume in the finance industry, yet it remains vastly unregulated. Inherent to its nature are issues with transparency, efficiency and security, which have been barely addressed by legislators post the 2008 crisis. We propose that the utilization of Smart Contracts in the OTC market and creation of “smart derivatives”, solves the majority of issues that are associated with the market. While other researchers have debated on this matter and proposed the use of Smart Contracts in OTC markets, there are no papers offering an example of practical implementation. We selected interest rate swaps (IRS) as the test-case derivative for implementation in the form of a smart contract. Having unpacked the mathematical and theoretical framework behind structuring and pricing IRS, we produced a Vasicek Simulated Yield Curve from the Ten Year Constant Maturity Treasury Rates and found that the curve was inverted, which, combined with a characteristic LIBOR Simulated Yield Curve pointed to an increasingly negative swap spread for longer maturities that was demonstrated with a plotted Swap Spread. The parameters of the model were derived from live market data through Maximum Likelihood Estimation with Monte Carlo Simulation of Euler Scheme discretized Vasicek instantaneous rates. We concluded that short term interest rate swap contracts were preferable and implemented a one-year Interest Rate Swap by instantiating the DAML Ledger Sandbox. The implementation offers the likely innovation of merging a Swap Execution Facility and a Swap Data Repository into one platform, ensuring end-to-end automation, as well as providing the benefits of visibility, while preserving anonymity, improving efficiency and security in the market.

To Decrease or Not to Decrease: The Impact of Zero and Negative Interest Rates on Investment Decisions

The suggestion to implement a negative monetary policy has divided economists and politicians. The effects of this experiment on the willingness of individuals and financial intermediaries to borrow and spend money and increase their risk are controversial. To provide insight into the debate, we provide experimental evidence revealing two important results. First, zero interest rates are more efficient than negative interest rates in terms of the impact on the willingness of individuals to borrow money and take risks. We suggest two behavioral explanations for this result. Second, we find no statistical difference between the effect that positive and negative interest rates have on the change in the allocation of risky assets in investment portfolios.