Interest and the Modern Economy

Zaman, Arshad and Zaman, Asad (2000): Interest and the Modern Economy. Published in: Lahore Journal of Economics 6 1 (2001): pp. 113-127.

Abstract

The argument that modern economies cannot function without interest is examined in detail. We show that Islamic alternatives to interest, which vary with the context and the type of loan, provide adequate substitutes. Interest based institutions lead to many types of difficulties both practical and theoretical. Islamic alternatives provide solutions to these difficulties.

• Item Type: MPRA Paper
• Language: English
• Keywords: interest; riba; Islamic economics; prohibition of interest; profit sharing; Ricardian equivalence; Modigliani Miller Theorem
• Subjects: B - Schools of Economic Thought and Methodology > B5 - Current Heterodox Approaches > B59 - Other

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