It is important to pursue financial engineering in innovative ways, but also keeping in view the Ahkam and Maqasid of Shari’ah.
Consumerism and Credit Cards: Implications for Islamic Finance
Islamic Economics Project
RESEARCH ON ISLAMIC ECONOMICS AND FINANCE AND ROLE OF FAITH IN MARKETS AND SOCIETY IN POST MODERN SCIENTIFIC AGE
Forex Trade and Islamic Viewpoint
Currencies are originally a medium of exchange and should only be exchanged for personal use in different countries. To make them a tradable commodity only for earning a profit is also against the basic philosophy of Islamic economics – Mufti Taqi Usmani
Some Observations on User Cost of Capital
Interest based financial system discourages investment in socially optimal profitable projects, but which are not favored because of relative cost comparison from the market interest rate. If sales do not increase, it may lead to business cycle fluctuations with unplanned increase in inventories. With increased pressure to service debt, the environmental degradation and human resource exploitation may become common and secondary concerns.
Consumption Smoothing – An Islamic Economics Perspective
It is an empirical observation that people desire to have smooth consumption throughout their lifetimes. Lifecycle consumption hypothesis (LCH) and permanent income hypothesis (PIH) try to explain that in micro-founded framework. Both negate the Keynes assertion that average propensity to consume (APC) falls as income rises. Some micro-economic evidence is also broadly consistent with LCH and PIH, at least in advanced economies.
Behavior of Firms in Islamic Economic Framework
This article takes a brief look at the theory of the firm in Islamic economics and how a firm’s objectives and governing framework is different in Islamic economic framework as compared to the neoclassical and value-neutral economic framework.
Corporate Governance: Agency Conflicts and Islamic Economics
Agency conflict arises when the various parties have different incentives or objectives in a mutual relationship. This article discusses Islamic economics perspective on the agency conflicts.
Wage Differentials or Discrimination: Islamic Perspective
Islam allows wage differentials based on productivity differences, but does not allow discrimination. Furthermore, if wage differentials are because of characteristics that require equitable distribution and access to resources, then, Islam has unique mechanisms that ensure equitable distribution of resources and opportunities.
Risk Aversion And Islamic Financial Economics
The question arises that if people are generally risk averse, are interest based investments and lending not the safest option to these people in which except from default risk, people are safe from fluctuations in payoffs and there is less uncertainty in payoffs. This article discusses how Islamic economic framework incorporates diversity in risk preferences.
Resource Economics: Islamic Perspective
Islamic injunctions put huge emphasis on making best use of the resources provided by Allah. Cultivating barren land and dignity of labor is given significant value and regarded as virtues. In an Islamic economic framework, the demand for economic resources, i.e. land, labor and capital is driven by the interest free and productive asset/activity based voluntary exchanges in a market economy.
Distribution of Resources in Islamic Economic Framework
Scarcity of resources is the basic premise on which the theories of classical and neoclassical economics are based upon. It implies that resources are scarce relatively as compared to the wants that are unlimited. But, this premise uses the word ‘wants’ in a general sense which includes both necessities and luxuries that people desire to have.
Islamic Economics Project 