Islamic Economics Project

Islamic economics is fundamentally a normative field, dedicated to the in-depth study of the normative principles outlined in the Qur’an and the Sunna (religious economics). In its empirical research, it probes into the economic behaviours and values of Muslims. As a result, it extensively utilizes economic tools to comprehend Muslim behaviour, integrating the economics of religion as one method of exploration. In reconciling normative (what should be) and positive (what is) economics, the discipline also emphasizes facilitating the transition from the current state to an ideal one, aiming to transform ‘what is’ into ‘what should be’. This agenda is central to Islamic economics, as it is to religious economics.

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Moral Reflections on Economics, Vol 5, Issue 12

By Islamic Economics Project on December 3, 2025 • ( Leave a comment )

December 2025 issue (Vol 5, Issue 12) of Moral Reflections on Economics features: “The Dual Structure of Islamic Economics: Economics of Religion and Religious Economics” by Assoc. Prof. Dr. Mohd Nahar Mohd Arshad, Department of Economics, KENMS, IIUM;
“Stabilizing Purchasing Power of Common Medium of Exchange” by Hifz Ur Rab; Highlights of Islamic Finance Development Report by Hammad; Book review of “Capitalism: A Very Brief Introduction” by James Fulcher reviewed by Aisha Wani; Research paper in focus on “Utility Maximization, Morality, and Religion” by Dr. Jonathan E. Leightner and regular sections of reflections, market news, economic and financial indicators and call for papers.

Download at: https://islamiceconomicsproject.com/periodicals/

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The Financial Crisis and the Systemic Failure of Academic Economics. Lessons from the Financial Crisis: Causes, Consequences, and Our Economic Future

By hammadiep on November 9, 2025 • ( Leave a comment )

The authors note that the instability leading to crisis is assumed away by the models which assume inherent stability. Economists are confined to models of stable states that are perturbed by limited external shocks. Economists failed to incorporate the intrinsic recurrent boom-and-bust dynamics characteristic of a complex economic system. Consequently, ‘systemic crisis’ is treated as an ‘otherworldly event’ absent from theoretical frameworks.

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Methodology of Economics: Secular Versus Islamic

By hammadiep on November 8, 2025 • ( Leave a comment )

The author asserts that Islamic economics is currently the result of applying Islamic rules and injunctions (Fiqh) to the secular economic framework, and is not yet a separate discipline that fully replaces secular economics. The author notes that methodology is a messy and confusing area in both fields. He highlights that in Islamic economics, it is often wrongly treated as a research design or work plan. The author explains that economics is usually called ‘science’ and is seen to be built for achieving its objectives on some perception of rationality. Methodology is the ‘theory of theories’; in the field of economics it refers to the “process economists use to authenticate the knowledge about economic phenomena”.

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Key Highlights of World Social Report 2025

By hammadiep on November 7, 2025 • ( Leave a comment )

The report calls for a new policy consensus based on equity, economic security for all, and solidarity. It emphasizes the need for structural transformations in policy, institutions, norms, and mind-sets, and a fundamental reorientation of policymaking through a social lens. A new consensus must prioritize strong social policies, investments in public institutions, and a people-centred approach to development, moving beyond the current over-reliance on markets.

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Foundational Problem with System of Interest

By hammadiep on November 6, 2025 • ( Leave a comment )

Efficiency is the name of conforming to laws of nature. Ideal performance of interest driven system requires the investment to produce nearly same rate of return so that interest rate may be considered a means of sharing of profit between financier and entrepreneurs and investment may not suffer adversely, but that being grossly contrary to nature, the system is inefficient.

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A Dynamic Prescriptive Approach to Complexity Economics

By hammadiep on November 5, 2025 • ( Leave a comment )

Complexity economics taught us that the world is an ever-changing system with no simple answers. The Dynamic Prescriptive Economics framework takes this knowledge and turns it into a governing principle: Adaptive Governance.
It provides a robust, measurable methodology to:
Quantify the cost of trade-offs using NBCs.
Design a path to synergy using STOs.
Integrate long-term wisdom using AER.

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Moral Reflections on Economics, Vol 5, Issue 11

By Islamic Economics Project on November 4, 2025 • ( Leave a comment )

November issue of Moral Reflections on Economics is published, featuring:
• “Complexity Economics: Dynamic Perspective” by Prof. Dr. Tariqullah Khan.
• Problems with Interest Based System by Hifz Ur Rab.
• Highlights of Social Report 2025 by Hammad.
• Book review of “Methodology of Economics” by Dr. Waleed.
• Research paper in focus on “The Economics Profession, the Financial Crisis, and Method” by Dr. David Colander
• Regular sections of reflections, market news, economic and financial indicators and call for papers.

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Do Islamic Cryptocurrency and Bitcoin Co-move at Different Investment Horizons?

By hammadiep on October 6, 2025 • ( Leave a comment )

Islamic digital currencies must refrain from a number of actions deemed prohibited by Islamic law, in contrast to traditional cryptocurrencies like Bitcoin. They cannot entail interest-based transactions (Riba), undue speculation or uncertainty (gharar), or gambling (maysir). Their frequent backing by physical assets, such as gold, gives them inherent stability and lessens the speculative bubbles that are typical of traditional cryptocurrencies, which is what makes them so intriguing.

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Kitab al-Isharah ila Mahasin at-Tijarah

By hammadiep on October 5, 2025 • ( Leave a comment )

Author explained the problem of double coincidence of wants in the barter trade. He wrote that even if the wants coincide, there may be disagreement on the counter values in exchange. Without divisibility of the good, the barter economy runs into barriers to trade. He also wrote on prudence in economic management. He emphasized the need for proactive procurement and infrastructure investments to ensure smooth supply chain, production process and market stability. He favoured procurement from the original nearby source to avoid intermediation mark-up and make purchases when the market has adequate supply and availability so as to avoid cost-push inflation.

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