Islamic Economics Project

History of economic man is fascinating. He has used the nature’s blessings to find and create new and innovative ways of maximizing utility. But, nonetheless, at all points in time, he does not feel satiated. He remains poor ‘relatively’ to the limitless desires and nature’s limitations. The dream of being ‘truly apart’ only remains a dream in everyone’s life. But, then, everyone achieves it one day. There is one place that everyone reaches where he is not accompanied by anyone. It’s his or her grave. Belief in life hereafter is the only thing that gives meaning to this world and life.

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Problems with Inflation Indexation of Loans

By Islamic Economics Project on February 28, 2012 • ( 2 Comments )

Time value of money is the problem for the investor to avoid keeping his/her money idle and to avoid forgoing the use of money that may bring positive value to his/her investment. However, it does not mean that the investor can demand an arbitrary increase as the cost of using money without taking the risk of a productive enterprise.

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Financing Higher Education Privately in an Interest Free Way

By Islamic Economics Project on February 23, 2012 • ( 1 Comment )

Higher education has become a necessity in current times with the increased competition in labor market and increased demands on keeping up with changing skills set. Nevertheless, the cost of obtaining higher education has also increased a lot in recent times. This article proposes an alternate way for financing higher education without the element of interest.

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Opportunity Cost of Capital in Islamic Economic Framework

By Islamic Economics Project on February 13, 2012 • ( 2 Comments )

Opportunity cost is a useful concept in economics. This article tries to explain how this concept is used to justify interest. Then, the article also highlights the problem with this approach.

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Islamic Economic Framework and Systematic Life

By Islamic Economics Project on February 9, 2012 • ( Leave a comment )

Abstaining from excessiveness in consumption, usury, speculation, gambling and fraud in trade and by engaging in charitable giving and living one’s life with the realization to be always helpful to the other members of society creates a sea of change if one starts believing in it and practice it.

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Analysis of Ethical Dimension of the Great Recession (2007-2010)

By Islamic Economics Project on January 26, 2012 • ( Leave a comment )

Unrestrained chase of self-interest, moral relativism, incentive-led economic choices and indifference to collective responsibilities has led to engender societies where economic interests have become the solitary basis of establishing and maintaining relationships.

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Scarcity of Resources and Islamic Economics

By Islamic Economics Project on January 24, 2012 • ( Leave a comment )

books on introductory economics seldom use naturally un-achievable aspirations in discussing the so called fundamental economic fact. Most of the essential things are really not scarce at all. Food per capita has actually increased since the 1970s as per Food and Agricultural Organization (FAO) data.

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A Brief Note on Automatic Stabilizers in Islamic Economic Framework

By Islamic Economics Project on January 11, 2012 • ( 2 Comments )

Non-discretionary fiscal policy with automatic stabilizers can help in stabilizing the business cycles. This article discusses how the institution of Zakat can act as automatic stabilizer in an Islamic economic framework.

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How to Make Mudarabah More Applicable in Islamic Banking

By Islamic Economics Project on January 9, 2012 • ( Leave a comment )

In Mudarabah, only the Rabb-ul-Maal bears all the financial losses as the sole financial investor. If an Islamic bank enters into a Mudarabah contract as a Rabb-ul-Maal, only the Islamic bank would have to bear all the losses. Disparity in payoffs if loss occurs in Mudarabah is one of the major reasons why Mudarabah is hardly used as a mode of finance in corporate financing.

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