BRIDGING FISCAL POLICY AND ISLAMIC FINANCE: The Role of Profit-and-Loss Sharing in Indonesia’s Post-Pandemic Economic Recovery
Abstract
This study examines the relationship between fiscal stimulus, Profit-and-Loss Sharing (PLS) financing, and economic growth in post-pandemic Indonesia through the lens of Maqâshid al-Syarî‘ah. While fiscal stimulus can accelerate economic recovery, its effectiveness depends partly on the capacity of financial institutions to channel public resources into productive economic activities. The study therefore investigates whether Islamic risk-sharing finance complements fiscal intervention in supporting sustainable economic growth. Using monthly time-series data for 2020–2025 obtained from Statistics Indonesia (BPS), the Ministry of Finance, and the Financial Services Authority (OJK), the study employs the Autoregressive Distributed Lag (ARDL) approach to estimate both short- and long-run relationships among fiscal stimulus, PLS financing, and economic growth. The findings indicate a significant long-run equilibrium relationship among the variables. Both fiscal stimulus and PLS financing exert positive effects on economic growth, suggesting that government intervention and Islamic risk-sharing finance can operate as complementary mechanisms for post-pandemic recovery. From a Maqâshid al-Syarî‘ah perspective, their integration promotes productive investment, wealth creation, and social welfare. The study contributes to the literature by demonstrating how Islamic risk-sharing finance can strengthen fiscal policy transmission to the real sector and support a more inclusive and sustainable growth framework.
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DOI: http://dx.doi.org/10.30821/miqot.v50i2.1841
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