Islamic Finance Revisited: Conceptual and Analytical Issues from the Perspective of Conventional Economics
AbstractAfter 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.
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Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp430.
Date of creation: Mar 2012
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Islamic finance; moral hazard; zero interest rates; Keynes and usuary;
Other versions of this item:
- Singh, Ajit & Sheng, Andrew, 2011. "Islamic finance revisited: conceptual and analytical issues from the perspective of conventional economics," MPRA Paper 39007, University Library of Munich, Germany, revised 10 Apr 2012.
- Sheng, Andrew & Singh, Ajit, 2013. "Islamic Finance Revisited: Conceptual and Analytical Issues from the Perspective of Conventional Economics," MPRA Paper 53036, University Library of Munich, Germany.
- A10 - General Economics and Teaching - - General Economics - - - General
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
- B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
- P4 - Economic Systems - - Other Economic Systems
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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