Date of Conferral

2022

Degree

Ph.D.

School

Business Administration

Advisor

Mohammad Sharifzadeh

Abstract

The COVID-19 pandemic caused a global financial crisis. Governments and central banks around the world took unprecedented measures to mitigate the effect of the pandemic-triggered financial crisis and maintain the stability of the financial system. The purpose of this cross-sectional quantitative study was to examine the capability of the Islamic financial system to mitigate the effect of the pandemic-induced financial crisis on the economy of Pakistan in 2020. The International Monetary Fund enhanced dynamic stochastic general equilibrium (IMF-DSGE) model provided the framework for this study. Data collection included conventional financial sector parameters, Islamic financial sector parameters, and country-level macroeconomic data from Pakistan in 2020. These parameters and data were inserted into the IMF-DSGE model for simulation. The results showed the Islamic financial system was more effective than the conventional financial system in mitigating the effect of the pandemic-induced financial crisis on the economy of Pakistan in 2020. Furthermore, the nonlinearized IMF-DSGE model was better than the linearized IMF-DSGE model in capturing the pandemic-generated financial crisis dynamics of the Pakistani economy in 2020. Regulators might use the results to mitigate the intensity of the financial crisis and maximize the gross domestic product of a country. Central banks might apply the results to formulate procedures to oversee financial institutions and maintain their financial stability. Results might also be used to increase people’s quality of life through stable jobs and reduced unemployment.

Download

Share

 
COinS