Concluding Remarks

Abstract

This book looks at an alternative way of improving the fiscal and monetary stance, and illustrating the application of the Islamic macroeconomic policy concept in the case of Malaysia. With the use of risk-sharing macro-market instruments to affect the fiscal and monetary policy transmission, there is a one-to-one mapping between the growth of the financial and real sector activities. It was demonstrated that an alternative fiscal and monetary policy framework in Malaysia could potentially lead to better fiscal sustainability and a more potent monetary policy in driving economic growth. To achieve this aspiration in Malaysia requires further efforts to understand and embrace the concept of Islamic finance and its principles, in particular risk-sharing principles in the management of macroeconomy.