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Islamic finance, growth, and stability

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  • Hasan, Zubair

Abstract

Economists regard the financial and the real sectors of an economy as complementary; the two sides of the same coin. Islamic finance conceives of these sectors differently, albeit not independent of each other. Islamic approach is distinct in that it shuns interest, speculation and indeterminacy. At the same time, it is not independent because Islam allows a time value for money, and maintains of asset liquidity plus system stability as its guiding business principles. The discussion n the subject is scanty. This paper seeks to fill the gap. A diversion briefly discusses debt versus equity as sources for financing growth bringing in technology.

Suggested Citation

  • Hasan, Zubair, 2021. "Islamic finance, growth, and stability," MPRA Paper 111885, University Library of Munich, Germany, revised Feb 2022.
    • Handle: RePEc:pra:mprapa:111885
    as

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    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. N. Gregory Mankiw & David Romer & David Weil, 1990. "A Contribution to the Empirics of Economic Growth," Working Papers 1990-24, Brown University, Department of Economics.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Islam; finance; Stability; Profit sharing; Debt; Equity; Technology Islam; finance; Stability; Profit sharing; Debt; Equity; Technology Islam; Finance; Growth; Stability; Technology;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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