Characterising the Islamic Financial Cycle in Indonesia Post-Pandemic Era: Markov Switching Approach

Irfan Nurfalah, Aam Slamet Rusydiana, Nisful Laila, Puji Sucia Sukmaningrum, Luthfi Nur Rosyidi

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review


Numerous scholars have conducted studies on the conventional financial cycle, yet there is a lack of scholarly discourse on the distinct Islamic financial cycle. However, Islamic finance plays a significant role within a nation’s economic framework, particularly in regions with a predominantly Islamic population. This study integrates variables from Islamic banking, the Islamic capital market, and macroeconomics, covering the period from 2009 to 2022. The research employs the MSVAR methodology to identify and analyze transitions between distinct regimes. The findings indicate that the duration of the deceleration regime phase is longer than the accelerated regime phase, lasting approximately 9 years versus 5 years. Furthermore, the study reveals that the six variables examined significantly impact Indonesia’s economic growth, with each variable displaying a unique response to shocks.

Original languageEnglish
Title of host publicationTechnology and Business Model Innovation
Subtitle of host publicationChallenges and Opportunities - Proceedings of the International Conference on Business and Technology, ICBT2023 Volume 2
EditorsBahaaeddin Alareeni, Allam Hamdan
PublisherSpringer Science and Business Media Deutschland GmbH
Number of pages17
ISBN (Print)9783031539978
Publication statusPublished - 2024
EventInternational Conference on Business and Technology, ICBT2023 - Manama, Bahrain
Duration: 7 May 20239 May 2023

Publication series

NameLecture Notes in Networks and Systems
Volume924 LNNS
ISSN (Print)2367-3370
ISSN (Electronic)2367-3389


ConferenceInternational Conference on Business and Technology, ICBT2023


  • Islamic Financial Cycle
  • Markov Switching
  • Post-Pandemic


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