Sukuk : a shariah compliant tool for financing budget deficits

Abstract EN

The lead paper (Pettifor, 2019) discusses a very important subject in macroeconomics policy.

Governments nowadays are playing a vital role in the economy.

No doubt that expansionary fiscal policies will lead to economic expansion and reduction in the unemployment rate.

The tools of financing this expansion are very important.

Ann Pettifor in her paper examined the subject without looking at the impact of foreign borrowing on the long-run economic development, which I believe, is needed for further examination of the government deficit finance in case it is financed by foreign loans.

Moreover, the trend of using ṣukūk as an Islamic tool for deficit finance needs to be studied to examine its short- and long-term impact on the main variables at the macro level of an economy.