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An analytical study of al-Ghazali’s thought on money and interest


  • Islahi, Abdul Azim


The present paper concentrates to study an important aspect of al-Ghazali economic thought, money and interest, and with rigorous analysis it attempts to explore its relevance and application in the modern period. Al-Ghazali recognizes money as one of the most important inventions in conduct of the economic affairs. He offers a rather sophisticated discourse as to the evolution of money and its various functions. He explains how money overcomes the problems of barter system such as lack of a common denominator, indivisibility of good and the problem of double coincidence of wants. These ideas of al-Ghazali are almost identical to those found in contemporary texts. He condemns those who hoard money or convert them into other objects. He discusses the harmful effect of counterfeiting and currency debasement. However, he allows for the possibility of representative or token money.

Suggested Citation

  • Islahi, Abdul Azim, 2001. "An analytical study of al-Ghazali’s thought on money and interest," MPRA Paper 41438, University Library of Munich, Germany, revised 2001.
  • Handle: RePEc:pra:mprapa:41438

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    References listed on IDEAS

    1. Islahi, Abdul Azim, 1982. "Economic thought of Ibn al-Qayyim (1292–1350)," MPRA Paper 41369, University Library of Munich, Germany, revised 1984.
    2. Islahi, Abdul Azim & Ghazanfar, Shaikh Mohammad, 1998. "Economic Thought of al-Ghazali," MPRA Paper 53465, University Library of Munich, Germany, revised 2011.
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    Cited by:

    1. Islahi, Abdul Azim, 2005. "Contributions of Muslim Scholars to the History of Economic Thought and Analysis upto 15th Century," MPRA Paper 53462, University Library of Munich, Germany.
    2. Abdul Azim Islahi, 2014. "History of Islamic Economic Thought," Books, Edward Elgar Publishing, number 16105.

    More about this item


    Nature and Functions of money; Difficulties of barter exchange; Interest (riba); Riba’l-fadl and Riba’l-nasi'ah; Counterfeiting and debasement of money;

    JEL classification:

    • B11 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Preclassical (Ancient, Medieval, Mercantilist, Physiocratic)
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General


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