Putriani, Diyah and Mat Ghani, Gairuzazmi and Kartiwi, Mira (2020) Exploration of agent-based simulation: the multiplier effect of zakah on economic growth. Journal of Islamic Monetary Economics and Finance (JIMF), 6 (3). pp. 641-666. ISSN 2460-6146 E-ISSN 2460-6618
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Abstract
Zakat plays an undeniably significant role in social life. The enforcement of zakah in early Islamic history is evidence that it is a powerful tool for fostering economic growth. The economy under the reign of Caliphate Umar Ibn Abdul Aziz even achieved a surplus, with no one having the right to receive zakah. Recent studies have attempted to link the role of zakah and economic growth qualitatively by arguing that zakah can contribute to economic development. However, the extent to which it has a multiplier effect on economic growth has not been examined. Considering this research gap, this study examines such an effect on economic growth, as represented by Gross Domestic Product (GDP). To capture the full impact of zakah on aggregate production, two scenarios are conducted, namely the economy with and without zakah. The simulation results show that zakah can promote aggregate production. On the other hand, the economy experiences lower aggregate production when there is no zakah. An agent based computational model (ABM ) simulation is employed to run the simulation. The application of ABM in this study is intended to introduce the use of computational study as an alternative method of developing research in Islamic economics.
| Item Type: | Article (Journal) |
|---|---|
| Additional Information: | 2565/83926 |
| Uncontrolled Keywords: | Zakah, Aggregate production, Bank lending, Agent-based computational model, Islamic economics. |
| Subjects: | BPH Islamic Economics BPH Islamic Economics > BPH531 Zakat |
| Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): | Kulliyyah of Economics and Management Sciences > Department of Economics Kulliyyah of Information and Communication Technology Kulliyyah of Information and Communication Technology Kulliyyah of Information and Communication Technology > Department of Information System Kulliyyah of Information and Communication Technology > Department of Information System |
| Depositing User: | Gairuzazmi Mat Ghani |
| Date Deposited: | 02 Nov 2020 12:07 |
| Last Modified: | 02 Nov 2020 12:07 |
| URI: | http://irep.iium.edu.my/id/eprint/83926 |
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