Abstract
This paper investigates how the problems of homelessness can be solved by pursuing interest-free Qard Hasan (QH) based monetary policy (MP) and examines its impact on equilibrium output, employment, inflation rate, expansion of the market size and on major macroeconomic variables. In interest-free MP, based on the principle of QH, the Central Bank (CB) lends to homeless people on QH or interest-free basis and thus directly transforms homeless individuals into homeowners. People who used to live on streets, jungles, train, and bus stations without proper amenities of life will suddenly find an honorable living space which they can call sweet home. The marketing and sales of homes will increase. This unprecedented transformation will not only change economic, health, and social conditions of such poor homeless cohort of the population but will also have a positive impact on the overall performance of the economy through the increase in aggregate expenditures. In addition, it will also create housing boom which will eventually shift the aggregate supply curve to the right. Simultaneous rightward shift in both aggregate demand and long run aggregate supply curves will increase potential equilibrium income, employment, and prosperity.
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Article Details
- Year: 2023
- Volume: 44
- Issue: 4
- Pages: 47 - 88
- Accepted: 28.04.2023
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DOI:
https://doi.org/10.5281/zenodo.16910704 -
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How to Cite?
Mohammad Selim, M. Kabir Hassan (2023). Mitigating homelessness and creating market participants by pursuing interest-free Qard Hasan based monetary policy. Journal of Economic Cooperation and Development, 44(4), 47-88. https://doi.org/10.5281/zenodo.16910704
