Fluctuations and Business Cycles Prevention by New Financial Instruments
and Banking Structure Reform
�
Bijan Bidabad
B.A., M.Sc., Ph.D., Post Doc.
Professor of
Economics and Chief Islamic Banking Advisor
Bank Melli Iran,
Tehran, Iran�������
Email: [email protected]
Abstract
Regarding the formation
of financial crises in monetary and financial markets of advanced economies and
its transmission to other countries through financial markets and foreign
trade, a solution is pointed out which is called the reform of financial,
monetary and banking structure. In spite of various theories about the source
of crises, studies in this field show that usurious banking structures are the
main source of crises. The curing method of this economic disease is to prevent
somehow the existing time-lag between �deposits interest rates� and �loans
interest rates�, which creates fluctuations in supply and demand of financial
sources. That is to say, banks should not function as a conventional economic
firm, but should function as a financial intermediate. Banking structural
reform and new financial instruments will be introduced in this regard.Profit
and Loss Sharing (PLS) Banking and its sub-systems as Joaleh Financial Sharing
(JFS) and Mudarebeh Financial Sharing (MFS) with new financial instruments of �Partnership
(Mosharekah) Certificate�, �Subscripted (Pazireh) Certificates� and �Future Certificate�
are introduced at commercial and specialized banking levels. �Interest-Free Bonds�
in four different groups of �Central Bank Interest-free Bonds�, �Banking Interest-free
Bonds�, �Treasury Interest-free Bonds� all in varieties on domestic money and Foreign
Currency are also introduced which in addition to elimination of usury, can be
efficiently used as secure financial instruments at central, commercial and
retail banking levels. �Saving Qarzul-Hasanah Certificate� as a kind of Interest-Free
Bonds are also introduced. Non-Usury Script-less Security Settlement System
(NSSSS) based on information and communication technology has been put forward
for creating a secondary market of financial instruments transaction which
provides the necessary background for financial structure reform. Squandering
prevention and waste prevention and economic ethic teachings are also
introduced as supplements in solving crises.
Keywords:
Business Cycle, Stabilization, Financial
Instrument, Bank, Finance, Secondary Market, PLS
1. Introduction
In spite of what
is mentioned, the occurrence of the crisis was not caused by America�s housing
sector depression, but the housing sector falls itself was a consequence of the
crisis. According to what is proved, the wavy and sinusoid movement nature of
economic activities automatically leads to conditions which move the economy
from prosperity to depression and crisis and then again to recovery and
prosperity. Older theories such as Paul Samuelson theory asserts that these
sinusoid movements are caused by the production inventory operations and supply
flow. That is to say, when the economy produces more than consumption,
commodities accumulate in storehouses, and in order to sell the accumulated
inventory, the seller reduces prices. The lowering of commodity prices and the
largeness of accumulated inventory will make production sluggish. The producer
will be forced to reduce production, and since it decreases the activities of
the firm, the income of factors of production (labor, capital, and others) will
be reduced. This means the reduction of income at macro-level, which leads to a
reduction of demand for goods and services in society as well. Lower income
again leads to lower prices and again pushes the economic firm to more
depression. This phenomenon continues until the economy turns from depression
to crisis. Practically at this stage, the cycle comes to a dead-stop and
production stops, because prices can�t decrease any more. This creates
production incentive (because of supply scarcity and price increase) and income
increase of factors of production and demand and prices the economy again moves
towards recovery and reaches prosperity, and the economy reaches the beginning situation
of the cycle. After a while, depression starts again, and a new cycle starts.
This
phenomenon is the result of the nature of human beings� behavior. That is to
say, the nature of people creates this behavior. Since the human being is
greedy in consumption and when he is rich, squanders a lot, but limited
resources prevent him from continuous squandering and greed. Therefore,
economic prosperity stops, because resources do not increase to economic
activities of the people proportionally. That is to say, the scarcities of
resources increase their prices and reduce profit margin, which is the start of
depression and the beginning of the turning towards the lower segment of the
business cycle.
2. Crisis
Review of
economic variables of the United States of America and other industrial nations
through the last four decades shows that the behavior manner of financial
markets and international commerce spreads crisis from sector to sector and
from country to country. Usually, crises start in advanced economies and
transmit to other countries. Since the 1960s, the USA faced a current account
deficit, while the country increased its budget deficit to stimulate the
economy, which led to twin deficits. Since the middle of the 1960s until the
beginning of 1980s, the money supply in the USA and most other advanced
economies increased more than 10 percent per year which pushed the inflation
rate up from the beginning of 1970s and the economy of some other countries
such as the United Kingdom faced stagflation[1]. Meanwhile,
the fight between Arabs and Israel started, and oil price increased. Some
economists believed that the depression of western countries, including the US,
was because of oil price increase that increased production markup cost. The
beginning of 1980 decade crisis in the US was also coincided with the oil price
increase and by applying deregulation policy in financial markets, and the
expansion of derivative transactions, and liberation of Saving and Loan
Associations activities caused their bankruptcy and depositors drew back their
deposits and invested in the stock exchange and derivatives markets. Interest
rate increase had a destructive effect on Saving and Loan institutes and caused
this crisis to prolong until 1990. There was again a new crisis in US and
Europe in 1990 which was also coincided with the oil price increase and second
Persian Gulf War which was the trail of hard stock exchange collapse in Black
Monday of 1987 which was controlled by Federal Reserve money injection. In
1992, the US economy moved from depression into prosperity, which lasted until
1999. The arrival of new internet innovations caused the flourishing of stocks
of internet companies and financial activities on the stocks increased so much
that the available assets of this market faced a price bubble. This bubble
which was called �Dotcom� bubble burst in 1999. The collapse of the Dotcom
market at the end of 1999 pushed the US economy into a new recession which
lasted until 2001. But this recession was not accompanied by the oil price
increase. The nine eleven attacks faced the depressed economy with a new shock.
Federal Reserve encountered this depression by increasing the money supply.
Interest rates were decreased, and transactions on real goods such as oil and
wheat were changed into financial paper transactions, which were accompanied by
a debt crisis. This was because most transactions were for speculation and not for
real goods transactions. By interest rate decrease, debt transaction started
and intermediaries discounted high-interest rate loans and replaced them with
low-interest rate loans. The loans were increased, and the loan was offered
even to creditless borrowers with over-priced collaterals. Speculators turned
to paper transactions, the results of which were manifested in late 2007.
Housing stock market collapsed first and pulled down the value of the stocks
based upon the value of collaterals and banks and financial institutes faced
bankruptcy. Investors� market confidence vanished, and they turned to real
commodity markets. Simultaneously, the atomic quarrel of Iran with western
countries increased the oil price growth rate followed by more increase in
other bourse commodity prices. The US attack to Iraq and its continuous
presence in that country together with special conditions of oil supply and
demand, and capital flight from stock markets and their movement toward the gold
and oil markets, increased oil prices around $150 per barrel and the price of
other goods in burses had also such an increase. Depression symptoms were not
manifested because oil demand in China, India, and other emerging economies and
OECD countries had not decreased. But after a while, oil demand of OECD
countries decreased, and by money injection of Federal Reserve of United States
of America, investors� confidence was revived, and capital moved from these two
markets to other capital markets. Oil price decreased to about $40 per barrel and
gold price collapsed too. After a while, investors felt that the economy has
been stabilized and from another hand, another economic giant (China) entered
international scene which had high rate of growth together with India,
Brasilia, Turkey, Argentina and other similar countries with high growth rate
created a new power in the global scene which decreased the stability and
importance of America and Europe in the global economy. The weakening of the
role of the United States of America in the global economy was exacerbated by the
crisis in Iraq and Afghanistan, while the relations of China and India with
middle-east countries were expanded. Meanwhile, the Russia economy revived
because it had changed into one of the largest oil and gas exporting countries
and gained a major share in Europe energy market. The gas flow cut of Russia to
Europe at the peak of cold winter demonstrated the new power balance to western
countries. Many advanced countries were more than before worried about the oil
market developments and the high level of dependency of western countries,
China and India to the Middle East became more obvious and was forecasted that
OPEC which is a cartel of 12 oil producing and exporting countries, will soon
dominate the oil market.
These
developments strengthened the idea that the market is an uptrend and the global
demand is improving beyond expectation. This issue will widen the gap between
oil producers and consumers and the overcome of the paper market (speculation)
over oil market is forecasted and the oil market risk and its global supply can
have a destroying effect if there are no solid regulations on oil financial
paper transactions. The quick price change of oil prices in derivative markets
outside the bourse, where transactions have been more than physical supply and
demand transaction facts, can exacerbate the conditions. America and Europe
economic developments are so that they can also have quick effects on oil price
and will increase it. If the US trade deficit with its trade partners, especially
with China reduces, we can expect the downward pressure on the dollar will be
reduced, which leads to the lower oil price. But it is not expected that the US
twin deficit will decrease in the near future. Therefore, we should expect
dollar devaluation and oil price increase, which gained $100 per barrel in
2011. Oil consumption in emerging economies is increasing and has increased
pressure on the oil price. On the other hand, economic conditions in some
European economies are not welcoming, and crisis is transmitting from a country
to another in Euro Zone, and we can expect higher oil prices and the
continuation of global economic crisis. Although oil price increase can be
regarded as a sign of economic growth and entrance to recovery and prosperity,
oil price increase expectation which increases oil prices does not reveal this
sign, but it is regarded as a higher risk of the economies in future. In other
words, the oil price increase based upon the physical increase of oil demand
can be regarded as a sign of recovery, and not the oil price increase caused by
financial oil paper transactions and speculations.
Economic
variables of the last decade bring the great crisis of the 1920s to mind. The
severe oil and grains price increase and successive draughts and unexpected
ecological and meteorological events have also exacerbated the problem. Similar
conditions were seen in the 1920s. During that decade interest rate was also
down, but in spite of low interest rates, the economic condition didn�t allow to
allocate enough investment in production. The Keynesian quarrel with classic
economists can be explained on this subject. Keynes believed that when the
economy is in a liquidity trap, or saving and investment are not coordinated;
it will be necessary to have a negative interest rate to obtain equilibrium in the
money market. It is not possible to use monetary policy in this condition because
the interest rate is so low that cannot be lowered any more. Essentially, a liquidity
trap occurs when there is a poor relationship between the interest rate and the
rate of return in real sector economy. That is to say, regardless of the rate
of return of investment, the interest rate goes down. One of the reasons for
this condition is risk acceleration of investment, which decreases the net
return of investment. The point is: if it was possible to have a negative
interest rate which is not practically possible, monetary policy could remove
crisis. Therefore, fiscal policies are prescribed for crisis removal, which has
been applied in the G20 group by injecting trillions of dollars. Practically,
this method moves out the economy from the crisis, but this takes 5 to 10 years
to adjust the natural economic powers and move towards prosperity.
3. Removal of crises by money market reform
The basic
solution of crises which has been neglected by economists is money market
reform. Studies[2]
show that usury structure of the banking system is the essential source of crises
and in spite of Samuelson view, inventory accumulation is also the result of the
crisis and not its cause. Also, in spite of western theories, housing and
construction are not the sources of depression, but the crisis is caused by a
structural behavior in money and banking sector. Explanation of this theory
which has mathematical proofs is that despite conventional economists� view
which considers money market as a single market, this market consists of two
separate markets; and bank operates as an intermediary between them. In other
words, on one side, we have banks� demand market for deposit sources which
create interest rate together with deposit supply, which is called deposit
interest rate. On the other side, by supplying sources, the bank creates
another market in which the supply of financial sources and demand for money
sources fixes the interest rate for loans and credit. That is to say; the bank
is playing between two markets of financial sources and uses. Now suppose that,
because of increased consumption, deposit sources decrease. This will push the deposit
interest rate up. This increase cannot push up the loan and credit interest
rate. This is because banks loan contracts have terms and bank is obliged to
wait for the maturity and then increase the loan interest rate for new loans
and then, increase all loan interests. During this period, the bank has to
tolerate losses and after a time lag can increase the loan interest rate to
compensate for this loss. Although this lag is not very tangible for people,
but, from an economic behavior point of view, it creates a special dynamic
relation between saving and demand for investment sources. It can be shown mathematically
that because of this time lag, the relation is according to a second order difference
equation. Second order difference equations have volatility characteristic,
which means they create cyclical behavior; therefore, practically transmit the
cycles created in the saving-consumption behavior of families sector to
production-investment sector. This theory is considered as the most important
cause of business cycles, and since the cause has been diagnosed, it can be
cured.
The
cure of this economic disease is to prevent somehow the time lag between the
balance of deposit interest rate and loan interest rate, which create
fluctuation in supply and demand of financial sources. That is to say, the bank
should not operate as an economic firm, but should operate as a financial
intermediate and obtain a commission as income. In traditional economies, banks
work as firm and not as intermediates. That is why the banking sector in
conventional usurious systems can create market fluctuations. In order to
change banks into financial intermediates, we have to describe interest rate
performance in the loan sector in a way that her outcomes go to depositors
rather than the bank itself. The essential solution of this has been explicitly
mentioned in divine books such as Old Testament, New Testament (Bible), and
Quran, which is the abolition of usury from monetary activities.
4. Profit and Loss Sharing (PLS) Banking
Abolition of
usury does not mean stopping the financial activities of the bank, but it means
that owners of financial assets do not earn a fixed interest rate on their
assets. That is to participate practically in profit and loss of borrower. This
Partnership is put forward in different Islamic participation contracts. In
these contracts, it is possible that the lender to participates in profit and
loss of the borrower. This banking system is classified as �Profit and Loss Sharing�
system, which is based upon the doctrine of the abolition of usury in banking
activities. Since profit and loss sharing changes bank from economic firm to
financial intermediary and practically accomplishes the previous descriptions, it
can reach a stable equilibrium by eliminating the time lag between saving
market and investment market. On the other hand, risks developed in the loan
market will be transferred to saving sector and the borrower and the lender
(depositor) together will enjoy profit or loss.[3]
Economic
literature has expressed many advantages about risk transference of Islamic
banking operations, which are described by Islamic banking researchers[4] , and
Islamic banking has been put forward as a financial stabilizer method[5].
But although it has been theoretically explained, Rastin PLS banking has not
been practically applied[6], and
this is one of the defects of PLS application[7]. In
2007, Bank Melli Iran started to consider this subject and tried to find a practical
solution to PLS banking. [8]
In this regard, an extensive study has been carried out under the supervision
of the author, and it is operating as a pilot plan. If this system works
successfully, it practically creates conditions in which risk problem of
investments will not transmit to banks, and crisis doesn�t find ground to
spread. This is because practically, Rastin PLS banking diverts risks from
credit facility to depositor and bank will not face any losses. On the other
hand, the strong and structural relationship between the loan interest rate and
deposit interest rate does not allow loss in one market, while the other one is
facing profit. That is, when in the loan market, the investor faces loss, the
PLS system doesn�t allow the transfer of this loss - in the form of profit
(interest) - to the depositor. That is, PLS transfers the loss to the depositor,
and both markets enjoy more relative stability. Therefore, fluctuations in the loan
interest rate in the supply side and deposit interest rate in demand side will
become restful.
This
is in contrary to conventional banking in which borrower, regardless of
obtaining profit or loss, has to pay interest to the lender, and he always gains
profit. In the PLS system, if borrower gains profit, the depositor will also
gain profit, and if the borrower faces loss, the lender (depositor) will also suffer
loss. In PLS system, regardless of the bank to be private or public, the basis
for fixing loan rate is the return of real sector economy, and bank operates as
intermediate of funds or attorney and receives a commission, and the remaining
profit of investment activity is paid to the depositor. Accordingly, agent bank
can receive deposits on the basis of PLS contracts by a general or special
participation contract in the form of attorney and invest it according to the
decision of depositor, or the bank can divide the outcome between depositors.
Then, the real profit is divided between them according to their agreements of
the parties and in the framework of regulations. In this regard, the bank
carries out its financial intermediary function and after deducting its
commission, transfers the results of investment as she is an attorney or agency
of depositor.
Because
of its intrinsic risk management, development of this banking system will also
absorb foreign investors, and since all transactions can be carried out on
cyberspace, the place of the transaction can move to anywhere around the world,
and other countries will be persuaded to use this kind of banking system. This
is because; the essential problem of conventional banking around the world is a
financial risk which causes the bankruptcy of the banks. By this kind of
banking system, it is possible to solve the problem of falling into crisis, and
since the initiation of the disease has been found, Rastin PLS banking can have
a curing effect on it.
5. Partnership (Mosharekah) Certificate and
Subscripted (Pazireh) Certificate
New instruments
and innovations such as Partnership Certificate and Subscripted Certificate are
used in Rastin PLS banking and bank can issue Partnership/Subscripted Certificates
and form the secondary market and activate banking and financial market more
efficiently and cause important developments. These new innovations can be
transacted on cyberspace internet markets. The existence of these two instruments
make it possible to have a financial market similar to the stock exchange for
transaction and transfer of deposits, and regarding the developments of
investment and production sector practically, the transaction price of these
certificates will change. These two new instruments are practically regarded as
valuable papers which are used for the transaction of deposits and represent
deposits allocated to entrepreneurs� projects by PLS method. Partnership Certificates
are nameless papers which are issued with a fixed nominal price and for a
certain period of time (investment implementation period) by the Rastin PLS
banking branch. Certificates holders are shared in the profit of the implementing
project proportional to the nominal value and duration of holding. Bank, according
to the request of the holder, invests the deposited money in one of the three
products of the bank. Holder of these papers can transact the papers over the
counter of the bank, or over the internet, therefore, these certificates are
assets which can be transacted internationally. Subscripted Certificate is
similar to Partnership Certificate but is used in endless or continuous
projects so that after the end of the construction period and the start of
operation of the project, the owner of the certificate will become shareholders
of the company in proportion to the value and duration of holding the certificate.
�
6. Joaleh Financial Sharing (JFS)
�Joaleh Financial
Sharing�[9] is
one of the subsystems of Rastin PLS banking system. In this arrangement,
regardless of the bank being private or public, the basis for fixing return
rate is the rate of return in the real sector and bank as agency and attorney provides
intermediary services and receives a commission for the supply of her capital
management services. Accordingly, the bank receives borrower (producer) request
for financial sources and lender (owner of financial sources or depositor) from
two different firms. In this case, the borrower is regarded as a producer or
seller. Meanwhile, the bank finances the supplier according to the request of the
buyer by the issuance of Future Certificate. In this method, the bank is a
financial intermediary which collects financial sources from buyers and gives them
to producer or entrepreneur. The entrepreneur is necessarily a legal entity.
Joaleh operations under the title of JFS, follow general regulations and
instructions of Rastin PLS banking.
7. Future Certificate
In order to
provide working capital of producing firms on the basis of JFS, a new financial
instrument is introduced. This instrument namely �Future Certificate� described
below, is quite different from prevailing �Future Contracts� in global stock
exchange markets. Future contracts of global stock exchange markets are issued
for special goods with defined quality and price, and a percent of the value of
the contract is to be reserved at the hands of a third party (usually stock
exchange organization), and the seller has to deliver the good to buyer at a
certain time in future; otherwise, the reserved value will be transferred to
the buyer. Future contracts can be transacted in bourse and can also be
canceled by a new agreement contract between the dealing parties. This action
is called �scalability of future contracts�. In this contract, the buyer and
seller agree on the future price. Arbitrage operations on future contracts will
change its transaction vale until its present (cash) value tends towards its
future value. Usually, by an offsetting transaction, a future contract can be
closed out in clearing house. Commodity futures contracts are different from interest
rate future contract on valuable papers such as bonds and to some extents, on
foreign exchange futures which involve interest rate in calculating future
price as a discount from spot price by considering margin money or, good-faith
deposit or earnest money which contains usury. This is because some of these future
contracts have predetermined return and the time affects its discount value of
spot value, and according to the interest amount, margin money is deduced from
its price. In other words, these contracts enter the realm of usury at least
equal to the amount of interest related to margin money, and so far margin
money is closer to spot price, its usury nature is intensified. Future
contracts are used in grain, meat, metals, edible and fiber materials, wood and
energy in bourses.
Future
contracts are applied to both real or absent goods. Since future contracts are
interchangeable; therefore, in future markets, we find many future contracts
which do not transact any goods, and just bind obligations between buyers and
sellers. This kind of transaction which is included in the broad definition of
money as quasi-money increases the number of valuable papers in the economy,
which is not controlled by monetary authorities and decreases monetary policy
effects. Moreover, no goods or services are produced through these contracts. This
is one of the defects of this financial instrument which can push the economy
into crisis.
The
difference of Future Certificate in Joaleh Financial Sharing (JFS) and future
contracts can be explained as follows:
� In Future Certificate,
100 percent of the future price of the transaction is transferred to the seller's
account.
� Each issued Future
Certificate indicates a transaction of real goods and has no offsetting
transaction.
� The seller is a
firm with a legal entity.
� Bank operates as
a financial intermediate and receives money from the buyer and allocates it to
the seller.
� Margin money is just
received from the seller (producer) in the form of guaranty or other
collaterals.
� At the end of the
period of the contract, the contracted commodity is delivered to the buyer
according to the contract and under the supervision of the bank, and the contract
is closed out.
� Future Certificate
can be transacted in the secondary market but with no offsetting. Therefore,
the final holder of the certificate will be the owner of real good at maturity and
is bound to deliver it.
� The trustee (Amin)
unit of the bank will supervise the consumption of allocated financial resources
to the producer.
� Future Certificate
can be issued for providing working capital of a production firm, but not for her
fixed capital.
� Regarding
these differences, there will be no paper markets for virtual or absent
commodities, and debt leverage crisis will not create economic crises.
8. Mudarebeh Financial Sharing (MFS)
�Mudarebeh Financial
Sharing (MFS)�[10]
is one of the subsystems of �PLS banking system�. In �Mudarebeh Financial Sharing
(MFS)� regardless of the bank being private or public, again the basis for
fixing Mudarebeh return rate is the rate of return in the real sector and bank
as agent or attorney provides capital management services to the depositor and
applies his financial sources into specific business Mudarebeh projects. The
yield of Mudarebeh as profit or loss is transferred to the depositor.
Accordingly, the agent bank invests the deposits of depositors in a specific
project on the basis of the decision of depositor through a sharing contract
and divide the results between depositors. Profit or loss will be divided
according to compiled instructions. In this regard, in carrying out her
financial intermediary functions, in the framework of agency or attorney, the bank
will transfer the investment yield to depositors after deducting her own
commission.
Bank
compiles contracts between the bank and Mudareb (borrower in Mudarebeh
contract) on the basis of Mudarebeh contract according to the depositors� view for
financial participation in profit and loss. Bank receives income from offering
this service.
Depositor
through the secondary market website for Partnership/Subscripted/Future
Certificates, or one of the branches dealing with PLS and after consulting with
experts about PLS products get the necessary information on depositing and
dispensing conditions and selects his proper case. After signing and
registering the contract, the system will automatically issue the Partnership Certificate.
At the end of the participation period, after receiving information about the
method of calculating the profit, accounting/auditing counter will calculate it
and pays it to the client (depositor).
MFS
plan is applicable based on PLS framework, and essentially prepares special
conditions for Mudarebeh participation. In this plan, a bank is also a unit
which allocates deposit funds to borrowers for Mudarebeh on behalf of
depositors and divides the profit and loss according to special contracts.
Contracts between the bank and each side of the contract can be on commission
or PLS basis. The entrepreneur (Mudareb) is a real or legal entity who receives
the financial share of the Dareb (depositor) according to a certain contract
and starts Mudarebeh activity. Amin (trustee) is a unit which supervises the
Mudarebeh activity on behalf of the bank.
Mudareb
also applies to a PLS bank branch and offers his PLS Mudarebeh proposal. Then
after receiving informing commission, bank will put the information about the
proposed PLS Mudarebeh project in the information portal of the bank to absorb deposits
of depositors. The information of the PLS plan includes economic, technical,
and financial justification of the project and the information about the entrepreneur
(Mudareb) and�
The
entrepreneur assessment unit will study the information about the project entrepreneur
(Mudareb) according to related instructions and reports if he is technically
and competently capable of conducting this project and send it to project
assessment unit. If the assessment were positive, this unit will define the
collaterals and guarantees according to the instructions and inform the
operator (Mudareb). After signing the contract, according to the contract, the
financial sources will be taken from depositor and is given to Mudareb and all
related documents including budget, timing, financial needs and method of
spending, method of project implementation, its phasing, method of quality
control, reporting and finalizing and delivery method of the project will be
given to trustee by Mudareb. Periodic reports should be delivered to the accounting/auditing
unit of the bank according to the prepared time table. At the end of the
project, profit and loss and bank�s commission will be calculated according to
formulas and related compiled instructions, and the share of depositors will be
calculated, and their account will be credited. If there are reports about ceasing
or delay in implementation of the project, the corresponding loss will be
calculated according to the compiled instructions.
9. �Interest-Free
Bonds
Islamic
financial instruments should have two main characteristics: firstly they should
be usury-free, and secondly, they should be efficient in the form of policy
application, financing, liquidity management of monetary authorities,
government and bank and non-bank financial institutes dimensions. One of the
most important instruments affecting monetary expansion is bonds. Open market
operation through the bond transaction can affect liquidity and other monetary
variables such as general price level, interest rate, and thereof supply and
demand in the economy through monetary expansion mechanism. Because of the usurious
content of conventional bonds, they are not Shariah-complied, and practical
application of this instrument is unlawful. The usurious content of these
papers does not let to use them in usury-free banking at central banking and commercial
banking level; therefore, this important monetary instrument cannot be applied
in usury-free banking. This means that without a novel solution, usury-free
central banking has not the necessary instrument to adjust monetary fine-tuning
of the economy and neither commercial banks have not reliable instruments for
financing and asset and liability management. Solving this essential problem is
a turning point in applying usury-free banking policies. Therefore, by putting
forward interest-free bonds, it is necessary to replace traditional bonds with interest-free
bonds for central banking, commercial, and retail banking. Vast studies in this
field resulted in the innovation of interest-free bonds. [11]
These bonds or certificates have two maturities. The
first maturity is when a certificate expires, and the buyer receives his money
back. After that, the buyer of the can obtain an equal loan to her nominal
value of the purchased bond simultaneously with receiving his money back. The
second maturity is when he pays back his loan and settles his borrowing
procedure down. The issuers of these papers can choose the time of the first
and second maturities corresponding to her monetary, financial or fiscal policy
subject to this condition that multiplication of loan by its duration is equal
to multiplication of debt by its duration.
Four
interest-free bonds can be introduced which, in addition to compliance with
Islamic Shariah, and without any Shariah tricks, are tied to assets and can be
used as reliable financial instruments in usury-free banking concerning central,
commercial and retail banking. These four interest-free bonds are as follows:
� Central bank interest-free
bonds which are issued by the central bank.
� Bank interest-free
bonds which are issued by commercial, development and specialized banks and
monetary institutes whom are under the supervision of the central bank.
� Treasury interest-free
bonds. These bonds are issued by government treasury.
� Commercial interest-free
bonds. These bonds are issued with special guarantees by private entities.
10. Foreign Exchange Interest-free Bonds
It is possible
to issue interest-free foreign exchange bonds similar to interest-free bonds in
domestic money. In this connection, the four above cited bonds can be issued in
foreign exchange denomination. The issuers and buyers of interest-free exchange
bonds are similar to interest-free domestic denomination bonds with the only
difference that their nominal value in two periods can be in the same
denomination or in two different foreign exchanges. In both cases, especially
the second one, which is bought in one currency and sold in another currency,
there is no usury involvement doubt. Therefore, according to the above
classification, we have again four kinds of interest-free foreign exchange
bonds:
� Central bank interest-free
foreign exchange bond which is issued by the central bank.
� Bank Interest-free
foreign exchange bond issued by commercial, specialized and development banks
and financial institutes whom are under the supervision of the central bank. Foreign
banks can also enter into this market.
� Treasury Interest-free
foreign exchange bond issued by government treasury.
� Commercial interest-free
foreign exchange bond which can be issued by private companies and firms which necessitates
special guarantees as before.
Issuing
interest-free foreign exchange bond�s effects are similar to issuing interest-free
bonds in domestic money. Moreover, it can stabilize the exchange rate, and the central
bank can manage different exchange rates in a short time by changing supply and
demand. The effects of this instrument are different, whether its denomination
in both periods is the same or not. When both denominations are the same, there
will be some kind of hedging for opposite to exchange risk for the buyer. If
there are two denominations at the first and second periods, paying it back by
another denomination will have hedging effect on the variation of the second
denomination foreign exchange. In addition to the central bank, all other banks
can enjoy this exchange risk coverage.
Interest-free
bonds are substitutes for conventional bonds and in addition to being
usury-free, can efficiently affect money expansion, and are capable of
liquidity management and monetary and banking financing. Some of these bonds affect
liquidity supply, and some others won�t and are neutral. In order to apply
efficient monetary policies, the central bank can issue, buy or sell interest-free
bonds and carry out monetary tuning adjustment policies. If these papers are
issued by commercial and specialized banks or non-bank money institutes which
have prudential and legal deposits at the central bank, their bond issuance
will have no monetary effect on the economy. If the central bank buys these
papers, she will expand the monetary base, and if she sells it, will contract
it. If these papers are bought or sold in the framework of government treasury
bonds to apply the fiscal policy, they will have different monetary and fiscal
effects on the economy and central bank can apply monetary policies by buying
or selling government treasury bonds. Using extra reserves of banks and other
economic institutes (when some institutes are confronting with liquidity shortages)
through issuing these bonds by commercial and specialized banks and
interest-free funds does not affect liquidity supply of the economy and is a
solution for liquidity risk hedging and debts and obligations covering. If the central
bank or government buy or sell these bonds, it will have different expanding or
contracting effects on the economy. By obtaining banking guarantees, these
papers can be issued by private entities in the framework of interest-free
commercial papers for financing private sector.
The secondary market of these papers on internet
with �Non-usury Scripless Security Settlement System (NSSSS)� with ability to
conduct a base-price-less tender and accepting highest competitive price
offered during the tender period makes possible transactions yields at market
prices. No base price lower than the nominal value is considered, and price
proposals of buyers form the interaction of expected interest rate and inflation
rate. In other words, the expected natural interest rate will shape in the first
and second periods. In addition, the designed transaction facilities of these
papers bring about market efficiency and convergence of their yield toward the
yield of other securities and the real economy rate of return.
11. Saving Qarzul-Hasanah Certificate
Saving
Qarzul-Hasanah Certificate (SQC) as a substitute for bonds finishes the circle
of Islamic financial instruments and provides financial market development background
inside and outside the country. The outstanding characteristic of these papers
is that they are based upon financial assets and have no pre-determined
interest coupons (zero coupons) and are based on �loan equal to future debt�,
or �debt equal to future loan� with �temporal withdraw right� which is given to
the other party and by creating reciprocal obligation, the primary market is
shaped. The secondary market based upon information technology is designed on
NSSSS sub-system in which the buyer will own the paper with his highest
competitive price proposal. Another outstanding feature of this financial
innovation is that it has no base price below its nominal price and is a
substitute for conventional bonds and stabilizes monetary and exchange markets.
Essentially, Saving Qarzul-Hasanah Certificate (SQC)
is a document which creates two equal rights between buyer and seller.
Essentially, the issuer of this paper undertakes to offer an equal amount of
financial sources for the same period to the buyer. The simple description of
this concept can be defined in Islamic interchange contract. That is, two
persons decide to interchange some special asset for a certain period of time.
The first person deposits a certain amount of money with the other one, and the
second person deposits the same amount of money with the first person for the same
period in the future. In this case, no extra material excess or privilege is
given to any of the two parties. In Saving Qarzul-Hasanah Certificate (SQC),
the first party is a real or legal entity, and the second party is the bank. On
the other hand, since the owner of this paper becomes a rightful person, he can
sell his right to a third party. This certificate can be transacted digitally
on the internet.
The detailed application plan of �Saving
Qarzul-Hasanah Certificate (SQC)� has been prepared for �Bank Qarzul-Hasanah Mehr
Iran�[12]. The
special characteristics of �Saving Qarzul-Hasanah Certificate
(SQC)� can replace this financial instrument at central banking, commercial
and retail banking level in both usury-free and usurious banking systems for
usury bonds without including any usury doubt in banking activities. Some of
the characteristics of this new innovation are as follows:
� Financing
different private and government sectors.
� Micro-financing
lower-income people.
� Charity
activities.
� Financial policy
instrument.
� Monetary policy instrument.
� Replacing usury instruments
in the capital market.
� To be used as a banking
guarantee and collateral.
� High liquidity
degree.
��
12. Non-usury Scripless Security Settlement
System (NSSSS)
In spite of the expansion
of Islamic and conventional financial methods at the international level,
electronic transmission of funds, whether through loan or non-loan, has not
been considered enough. In spite of the expansion of Real time Gross Settlement
System (RTGS), lack of electronic payment system in information technology
systems for investment projects, Automatic Clearing House (ACH), Clearing House
of Valuable Electronic Papers and International Bank Account Number (IBAN) and on
the other side, the expansion of international inter-bank integrated networks
such as Single Euro Payment Area (SEPA), The Society For Worldwide Interbank
Financial Telecommunication (SWIFT), Inter Bank Information Network and carried
out activities for absorbing international cooperation in financing by exchange
sources of different countries have not been successful yet. In this regard,
the role of application of electronic payment systems for absorbing foreign
investments from retail sources and designing negotiable financial instruments
for internet secondary markets should be considered. This plan introduces
various investment financing methods in a new model based upon information
technology to complete the circle of investment financing with no doubt of
usury.
The compliance with Shariah on the one hand, and
easy access to international retail exchange funds are two main factors in usury-free
innovations of this text. In this direction, designing a new system called �Non-Usury
Scripless Security Settlement System (NSSSS)� with usury-free instruments and
without any Shariah tricks, and by new innovation of usury-free financial instruments
based upon information technology including Partnership Certificate and Subscripted
Certificate in Rastin PLS banking, Future Certificate in Joalah Financial
Sharing (JFS) and central bank, bank, treasury and commercial interest-free bonds
and Saving Qarzul-Hasanah Certificate (SQC) to finance liquidity needs of banks
and government and private entities and people the both goals in designing
Islamic financial instruments and markets are fulfilled. [13]����
This system is designed for Rastin PLS banking instruments
and other usury-free financial innovations transactions as cited above. The
difference between NSSSS and SSSS systems is in their negotiable papers�
transaction instruments. Transactions and settlement process in NSSSS are based
upon usury-free transactions and those usury-free transactions which are not
dubious in usury content, while the SSSS system is designed for conventional
transactions. A sample of this system has been designed for Rastin PLS banking
products of Bank Melli Iran[14]. General
characteristics and capabilities of this system are:
� Electronic
payment through electronic interbank network cards.
� Possibility of
using various denominations (foreign exchanges).
� Application of
different languages.
� Possible
relation to SWIFT and other electronic payment systems such as PAYPAL.
� Possibility of
using Automatic Clearing House (ACH) for small amounts of money, and ARTGS for
higher amounts by using IBAN and other integrated customer identification techniques[15]. �
� Creating
electronic counters to offer usury-free negotiable papers.
� Possibility of
observing buyers and sellers queue and their price proposals.
� Organizing
tenders and final selling of Islamic papers according to competitive prices.
� Automatic
payment after tender coming out and accepting the proposed highest price in the
tender.
� Consolidation
and integration with other financial systems and sub-systems in Core Banking.
� Conducting
accounting and registration activities, customers� desktop services, following-up
of records and processes, auditing, and supervision.
� Generating
managerial reports according to the needs of various levels of managers,
experts, staff, and customers.
� Comparing
various papers (business intelligence) regarding expected profit, maturity, the
competence of entrepreneur, and other qualitative characteristics of the
valuable products and papers affecting yield and risk.
� Risk management
system including liquidity, credit, market, and operational risks.
� Designing blocks,
units, and baskets of defined financial certificates.
� Providing
analytical and financial engineering tools.
� Coding valuable
papers according to international standards.
13. Squandering and ethic economics as a
complementary method in preventing crises
Ethic economics,
as a subject which is always considered in the Islamic economic philosophy, has
been rarely considered in new economic theories. We put forward the ethic
economics as a new name for old valued subjects in economics, which by
considering ethical principles, analyzes the economic phenomena and behaviors.
In this view, the aim of economic studies is not just studying material
problems without value and ethic observations. But human being ethical values
should be considered accompanying with economic analysis in such a way that
private and social material benefits should be considered together with
spiritual and ethical characters of the human being. This view towards economic
problems will put forward two material and spiritual dimensions of human being behaviors
in relation to private and social economic areas. This approach assesses
private and social behaviors which are different from materialistic view to
economics and while accepting scientific economic rules, tries to find material
and spiritual welfare in a wider view than pure material.
Another alternative of economic crisis pathology is
also returned to human being behavior. We people, who indulge in world loving
attributes, and practically, provide conditions for exacerbating the crises.
That is to say, we indulge in consumption and are greedy in compiling assets,
extravagance and waste, which always widen business cycles. This behavior will
exacerbate the crisis with severe depression and sever prosperity. If human
being behavior improves her behavior so that ethical and mystical teachings
which are prevailing in Islam and other Devin religions to be followed, it
practically decreases the severity of the crisis. When we are facing
extravagance and waste in society, practically over-consumption behavior will
increase crisis oscillations and sooner reach depression and prosperity with
higher and harder effects. Therefore, we should try to apply ethical and mystical
teachings to human being behavior. That is, people without governmental pushing
mechanism, prevent extravagant spending and economic greed.
Squandering
means wasting resources and is against the maximization principle of resources�
utilization. According to Neoclassic theory of consumer behavior, the
consumption is based upon a series of assumptions that some of these
assumptions, such as unsaturation of consumption, can be violated in Ethic
Economics. According to Neoclassic Economics, people tend to maximize their utility
of consumption subject to their priorities for work and leisure times. But
practically, consumption utility overcomes leisure time utility. Squandering
sources is a kind of wasting resources, but the term of squandering has a wider
meaning which includes over-doing in every case, while waste does not have this
variety of meaning. Squandering causes waste or throwing away some commodity resources,
because of �consumption greed�, �looking at Jones�, �show-off consumption�,
�persuading consumption�, �habitual consumption� or more generally pro-consumption.
It was shown[16]
that consumer loses some of her utility by squandering. Therefore she has to
work more and rest less to compensate the wasted income sources, without obtaining
extra utility. In simple words, squandering wastes peoples� leisure time and
the utility of leisure time.
Evidence of squandering in the producer�s behavior
and production processes are observable. The production line can produce damaged
or corrupt raw materials or produced goods or produce goods at a higher price
and use factors of production more than the need for various reasons. In other
words, the main portion of squandering in production leads to inefficient use
of factors of production. Evidence of squandering can be observed in
production, total efficiency, a un-optimal combination of factors of
production, production damages, and wastes and corruption of products. �
Squandering prevention frees a large share of
economic resources and labor force and capital which can easily be used by
firms during the crisis to breakdown the curve of the business cycle which is
moving towards depression and crisis and lead it towards recovery and
prosperity again. On the other hand, since we will not face extravagance during
prosperity, the economy will not reach the saturation threshold and therefore,
before the economy reaches saturation conditions, moves towards depression and
experiences light prosperity and light crisis and therefore, the wave domain of
business cycle become very narrow which means relative stability of the
economy.
Many socio-economic subjects which have been the
header of strategic policies of human beings have been prevailing for thousands
of years, and Divine wised have described these teachings among their Shariah
rules. We can mention one of these subjects as �sustainable development�, which
is one of the prevailing subjects since the end of the last century. Although
this subject as a modern theory was put forward in the 20th century,
its classic concepts in ethic economics have been less considered. One other subject
is extravagance by the meaning of over-consumption. Generally, this concept
coincides with pro-consumption and consumption economics at the national level,
but its application at the international level brings special concepts to mind.
Perhaps, in the end, it is convenient to mention
that prophets and Divine masters have been the wisest persons on the earth, and
it is wisdom, which is the path-finder of goodness and salvation of human
being. If human being catches this subject that their teachings are the
path-finder of life and make use of their teachings and does not give priority
to her own wisdom in one way or other, she will have surely a better material
and spiritual life.
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[1] - Of course, more
than others, the UK stagflation was due to the economic effects of her colonies
freedom.
[2] - Bidabad, Bijan, Stabilizing
Business Cycles by PLS Banking and Ethic Economics
[3] - When talking about Rastin PLS banking, it should
not be considered that we are regarding the banking system of Iran. This is
because it can easily be shown that many of Islamic contracts put forward in
Usury Free Banking Law of 1983 are intrinsically usurious.
Bidabad, Bijan, Economic-juristic analysis of usury in
consumption and investment loans and contemporary jurisprudence shortages in
exploring legislator commandments. Proceeding of the 2nd
International Islamic Banking Conference. Monash University of Malaysia. 9-10
September 2004. Reprinted in: National Interest, Journal of the Center for
Strategic Research, Vol. 2, No. 1, winter 2006, pp. 72-90. Tehran, Iran. http://www.bidabad.com/doc/reba-en.pdf
http://www.bidabad.com/doc/reba-fa.pdf ��
Bidabad, Bijan, Sufi foundation of Islamic economics,
money, bank, insurance and finance from a theosophy point of view.
http://www.bidabad.com/doc/mabani-erfani-eqtesade-islami.pdf
According to exact definition of usury, Installment
Selling contract, Mortgage Hire Purchase and Debt Buying contracts with
compound interest in the delay of installment payments are in the domain of
usury. Of course by considering all conditions about prohibition of usury, Good
(interest-free) Loans, Civil Partnership, Legal Partnership, Direct Investment,
Modarebah, Forward Deals, Joaleh (working on behalf), Mozareah (cultivation
loan contract), Mosaghat (irrigation loan contract) and Ejareh (rental
contract) are not in the domain of usury. In all above contracts except Good
Loan which has no interest and Ejareh in which the rental is pre-defined,
interest should not be pre-fixed, otherwise, they will fall in usury
realm.�
Bidabad Bijan,
Non-Usury Bank Corporation (NuBankCo) The Solution to Islamic Banking.
Proceeding of the 3rd Islamic economics
conference, 2003, Tarbiyat Modarres University, Tehran.
http://www.bidabad.com/doc/NUBankCo-en.pdf
http://www.bidabad.com/doc/sherkat-sahami-bank.pdf
In other words, if we want to perform Rastin PLS
banking, we have to make special changes in current banking system. These
changes include from developments in Usury Free Banking Law, elimination of
Shariah tricks used by banks and changes in organization of banks. Regarding
the usury content of banking system of Iran in recent decades, occurrence of
crisis could be forecasted and it is seen, the crisis has been transmitted from
industrial countries to Iran and housing depression consequences have been seen
in housing sector of Iran which is the effect of the crisis. As it was
mentioned before about the basic cause of financial crises, the reason for
transmission of the crisis to Iran was the usury content of banking system of
Iran, and if it was usury-free, that is, depositor really participated in
profit and loss of the borrower, the crisis would not been transmitted to the
country. As we see since no country truly conducts Islamic banking, crisis
transmits from country to country.
��
[4] - Mahlkecht,
Michael (2009). Islamic Capital Markets and Risk Management. London: Risk
Books.
[5] - Zarqa,
Muhammed Anas (1983) :Stability in an Interest-free Islamic Economy: A Note�,
Pakistan Journal of Applied Economics, Karachi, (Winter 1983), Vol. 2, pp.
181-88.�
[6] - Khan,
Shahrukh Rafi (1984) �An Economic Analysis of a PLS Model for the Financial
Sector�, Pakistan Journal of Applied Economics, Karachi, (Winter 1984) Vol. 3,
pp.89-105.
[7] - Rosly,
Saiful Azhar (2006). Critical Issues on Islamic Banking and Financial Markets:
Islamic Economics, Banking and Finance, Investments, Takaful and Financial
Planning. Author House.
[8] - Bidabad, Bijan; Jina Aghabeigi, Mahasti Naeemi, Azarang Amirostovar, Saeed Salehian,
Saeed Nafisi Saraee, Alireza Mehdizadeh Chelehbari, Hojattollah Ghasemi
Sayghalsaraee, Bijan Hossainpour, Saeed Sheikhani, Mahmoud Allahyarifard,
Mohammad Safaeepour, Nadia Khalili Velaee. Detailed design of Profit and Loss
Sharing (PLS) banking. Office of Research and Planning, Bank Melli Iran. 2008,
Tehran.
Bidabad, Bijan. A
glance at Profit and Loss Sharing (PLS) and the subsystems of Modarebah
Financial Sharing (MFS) and Joaleh Financial Sharing (JFS), 2011, Tehran, Iran.
http://www.bidabad.com/doc/negahi-bar-pls-mfs-jfs.pdf
Bidabad, Bijan; M. Allahyarifard. Information and communication
technologies in establishment of Profit and Loss Sharing (PLS) Mechanism. Quarterly Journal of New
Economy and Commerce, vol. 1, No. 3, winter 2006, pp. 1-37.
http://prd.moc.gov.ir/jnec/farsi/3rd/Article2.pdf
http://www.bidabad.com/doc/Pls_it-fa.pdf
Bidabad, Bijan; M.
Allahyari Fard. Operational Mechanism of Profit and Loss Sharing (PLS) Banking,
Financial innovations of Mosharekeh (Partnership) Certificate and Pazireh
(Subscripted) Certificate with international financial efficiency. Presented at
the second conference of Banking services and export, Bank of export
development, 18 October 2008, Tehran, Iran.
http://www.bidabad.com/doc/PLS-Banking.pdf�
http://bidabad.com/doc/PLS-Banking-Export-Deveopment-Bank-2.ppt
http://www.bidabad.com/doc/PLS-banking-Executive-Mechanism.pdf
Bidabad, Bijan; Mohammad
Safaeipour. The Electronic Market for Transaction of Mosharekeh
(Partnership)/Pazireh (Subscripted) Certificates. Fifth Conference of
E-Commerece, 23-24, November 2008, Ministry of Commerce, Tehran, Iran.
http://www.bidabad.com/doc/charchoobe-bazare-electronic-pls.pdf
http://www.ecommerce.gov.ir/EArchive/EArchiveF/Item.asp?ParentID=43&ItemID=182
[9] Bidabad,
Bijan; J. Aqabeigi, A. Amirostovar, A.
Hezaveh, A. Shafiei, S. Nafisi Zobdehsaraei, A. Mehdizadeh, A. Hayatdavoodi, B.
Hussainpour, S.A. Hussaini, A. Shali, M. Kashefi, M. Allahyarifard, M. Safaeipour,
A. Kosari, B. Einollahzadeh, M. Naeimi, N. Khalilivelaei, Shakeri, M. Naseri.
Detailed design of Joaleh Finance Sharing (JFS), a sub-system of Profit and
Loss Sharing (PLS) banking. Bank Melli Iran, Tehran, 2010.
[10] Bidabad,
Bijan; J. Aqabeigi, A. Amirostovar, A.
Hezaveh, A. Shafiei, S. Nafisi Zobdehsaraei, A. Mehdizadeh, A. Hayatdavoodi, B.
Hussainpour, S.A. Hussaini, A. Shali, M. Kashefi, M. Allahyarifard, M.
Safaeipour, A. Kosari, B. Einollahzadeh, M. Naeimi, N. Khalilivelaei,
Shakeri.Detailed design of Modarebah Finance Sharing (MFS), a sub-system of
Profit and Loss Sharing (PLS) banking. Bank Melli Iran, Tehran, 2010.
[11] - Bidabad, Bijan; M. Allahyarifard and M. Rabiei. Usury-Free Bonds (in Domestic Money and
Foreign Exchange) and Islamic Central Banking Monetary
Instruments. Proceedings of the 3rd international conference on
development of financing system in Iran with cooperation of center for
Technology Studies of Sharif University and IRTI of IDB. 19-20 February, 2011,
pp. 517-540.� http://www.bidabad.com/doc/Islamic-banking-bond-fa.pdf
http://www.bidabad.com/doc/Islamic-banking-bond-en.pdf
Bidabad, Bijan; Abul Hassan, Ben Ali Mohamed Sami,
Mahmoud Allahyarifard. Interest-Free Bonds and Central Banking Monetary
Instruments. International Journal of business and Management Science. Vol. 3,
no. 3, August 2011.�
[12] - See:
Bidabad, Bijan; A. Siahpoush,
M. Mirzaei Qazi, S. Aljabouri, H. Nasrollahi, Z. Qolami, A. Sharifi, Amir
Shams, Sh. Akbarzadeh. Detailed Design of Qarzul-Hassaneh Saving Certificate
(Bond), Bank Qarzul-Hassaneh Mehr Iran. 2011.
Bidabad, Bijan. Legal Analysis
of Usury-Free Bonds, 2011. http://www.bidabad.com/doc/legal-analysis-of-non-usury-bonds.pdf
Bidabad, Bijan Saving
Qarzolhasana Cerificate, 2011. http://www.bidabad.com/doc/gavahi-qarzulhasana-pasandaz.pdf
[13] - Bidabad, Bijan; M. Allahyarifard, IT-Based Usury-Free Financial Innovations. Proceeding
of ECDC 2010, 5th International Conference on e-Commerce in
Developing Countries: with focus on e-Banking & e-Insurance. ECDC 2010,
15-16 September 2010. http://www.bidabad.com/doc/non-usury-finance-it-en.pdf
[15] - Integrated
identification system is being compiled under the PLS experts committee in
Department of Organization and Systems of Bank Melli Iran.
[16] - Bidabad, Bijan; Prodigality in ethic
economics. Proceeding of Correcting
Consumption Pattern Conference. Institute for Trade Studies and Research,
Ministry of commerce, 26 July 2010, pp. 49-76. Tehran, Iran. http://www.bidabad.com/doc/esraf-eghtesade-akhlagh.pdf
Bidabad, Bijan; Squandering
in Ethic Economics (Consumer and Producer Behaviors Analysis). 2010. http://www.bidabad.com/doc/esraf-eghtesade-akhlagh-en.pdf
Bidabad, Bijan; Overconsumption
in Ethic Economics and Sustainable Development. 2010.
http://www.bidabad.com/doc/toseeh-payedar-eghtesade-akhlagh-en.pdf
Bidabad, Bijan; Sustainable
development and over-consumption in ethic economics. Proceeding of Correcting
Consumption Pattern Conference. Institute for Trade Studies and Research,
Ministry of Commerce, pp. 377-400. 26 July 2010, Tehran, Iran.