Singh, Ajit and Sheng, Andrew (2011): Islamic finance revisited: conceptual and analytical issues from the perspective of conventional economics. Published in: Cambridge University CBR Working Paper , Vol. 2012, No. Working Paper 430 (May 2012): pp. 1-35.
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After a brief recent empirical sketch of Islamic finance, the paper turns to its main theoretical and conceptual purpose. It seeks to relate the concepts of Islamic and conventional finance, and to examine certain important questions which arise from the interaction between these systems. The paper is written from the perspective of conventional modern economics, as the authors are students of the latter.
The paper discusses the main tenets of Islamic finance, as well as those of modern economics, including the implications of zero interest rates and those of Modigliani and Miller theorems.
The most notable finding of this paper is that John Maynard Keynes’ analysis of employment, interest and money provides, inadvertently, the best rationale for some of the basic precepts of Islamic finance. The paper concludes that there is no inevitable conflict between the two systems and cooperation between them is eminently desirable and feasible.
|Item Type:||MPRA Paper|
|Original Title:||Islamic finance revisited: conceptual and analytical issues from the perspective of conventional economics|
|Keywords:||Islamic Finance; Moral Hazard; Keynes; Zero Interest Rates; Usuary|
|Subjects:||A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General
B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B41 - Economic Methodology
|Depositing User:||Ajit Singh|
|Date Deposited:||26. May 2012 04:16|
|Last Modified:||12. Feb 2013 03:51|
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