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Macroeconomics: an Islamic Perspective

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Abstract

Islamic economics as a distinct school of thought within economics, studies the rationale and consequences of the resulting decisions. Naturally, Islamic economics does not have to be distinct in every aspect from its mother discipline. Islamic and conventional economics share several areas of behavioral analysis. However, the area of macroeconomics appears to be a good ground to develop distinct foundations. This is another step towards offering more general, yet less cryptic description of the major behavioral functions, especially those of saving, investment, money supply, and demand. At this stage, the target is to scrutinize the characteristics of macroeconomic equilibrium in an Islamic framework and ascertain its policy implications. The ultimate objective of laying the foundations of Islamic macroeconomics still requires further work. The specification of explicit introduction of consumers’ behavior is one area. The mathematical derivation of equilibrium and its stability conditions is another. All what can be said at this s age is that few more steps have been taken and there is more to come.

Suggested Citation

  • Al-Jarhi, Mabid, 2002. "Macroeconomics: an Islamic Perspective," MPRA Paper 66938, University Library of Munich, Germany, revised 2004.
    • Handle: RePEc:pra:mprapa:66938
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    macroeconomics; money; finance; saving; investment; money demand; money supply; money creation; equilibrium; public finance; Zakah; Awqaf; financial markets; stability.;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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