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Towards an Islamic Macro Model of Distribution: A Comparative Approach

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Abstract

This paper' presents some ideas on the construction of a macro- distribution model of an Islamic economy. It introduces a model based on the concept that in the Islamic (in contrast to Muslim) society, most Muslims are propertied, though to different degrees, because of the application of Zakah. This implies two important propositions. Firs the study of distribution is inseparable from that of redistribution. Second, the distinction in saving behavior between "capitalists" and "laborers" becomes immaterial. The results of the model indicate no predominance of the behavior of any particular class to the determination of either fuctor shares, or profit rate. The results of the model also indicate that an Islamic economy would have higher growth, higher return on capital and more equitable distribution of wealth than a western economy of the Kaldor-Pasinetti type.

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  • Al-Jarhi, Mabid, 1985. "Towards an Islamic Macro Model of Distribution: A Comparative Approach," MPRA Paper 66718, University Library of Munich, Germany, revised 1985.
    • Handle: RePEc:pra:mprapa:66718
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    References listed on IDEAS

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    1. M. Bruno, 1969. "Fundamental Duality Relations in the Pure Theory of Capital and Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(1), pages 39-53.
    2. Al-Jarhi, Mabid, 1980. "A Monetary and Financial Structure for an Interest-Free Economy: Institutions, Mechanism & Policy," MPRA Paper 66741, University Library of Munich, Germany, revised 2004.
    3. Burmeister, Edwin, 1974. "Synthesizing the Neo-Austrian and Alternative Approaches to Capital Theory: A Survey," Journal of Economic Literature, American Economic Association, vol. 12(2), pages 413-456, June.
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    6. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 267-279.
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    8. F. A. Lutz, 1961. "The Theory of Capital," International Economic Association Series, Palgrave Macmillan, number 978-1-349-08452-4 edited by D. C. Hague, December.
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    More about this item

    Keywords

    redistribution; growth; Kaldor-Pasinetti; Zakah; public finance; equity;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • P4 - Political Economy and Comparative Economic Systems - - Other Economic Systems

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