Tag Archives: Macroeconomics

Towards an Integrative Framework for Understanding Muslim Consumption Behaviour

In a new paper recently published in Humanomics (Vol 33, Issue 2), an attempt is made to integrate Islamic and mainstream economics framework towards a more realistic understanding of Muslim consumption behaviour. First, the paper gives an account of the … Continue reading

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Labor Productivity and Technical Progress in Islamic Economic Framework

Salman Ahmed Shaikh Most developing countries have lower labor productivity. Some of the reasons why people are not able to increase their productivity include lack of education and hence lack of employable skills, poor health and malnutrition. Islam has made … Continue reading

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Some Observations on User Cost of Capital

Salman Ahmed Shaikh Mainstream economics defines physical capital stock as things that are ‘produced means of production’. Examples of physical capital stock include machinery, tools, equipment, buildings, fixtures, infrastructure, installations and production plants, for instance. In a market economy, physical … Continue reading

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Consumption Smoothing – An Islamic Economics Perspective

Salman Ahmed Shaikh 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 … Continue reading

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Wage Differentials or Discrimination: Islamic Perspective

Salman Ahmed Shaikh It is a fact that income inequality even in developed countries is high and has been increasing despite sustainable growth experienced in growing East Asian countries and also in Europe and North America in general. One of … Continue reading

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Production Function in an Islamic Economic Framework

Salman Ahmed Shaikh Production function in economics explains the functional relationship between inputs and output. Whatever mathematical form the production function takes, the basic ingredients of any production function are inputs and how they relate with output. The most commonly … Continue reading

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Circular Flow Model: Islamic Economics Perspective

Salman Ahmed Shaikh As per Islamic principles, within certain bounds, the market forces can operate and will determine which goods should be produced and offered at what price. Through private sector investment and production, resource markets and product markets will … Continue reading

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Development from Islamic Economics Perspective

Salman Ahmed Shaikh In neoclassical growth theories, the emphasis is on increasing savings and technological progress which brings about increase in capital per worker and eventually output per worker. In ‘endogenous growth theory’ models, more sophisticated work has been done … Continue reading

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Demystifying Economic Behavior: Islamic Perspective

Salman Ahmed Shaikh Humans are much more than utility maximizing machines. They are capable of using both material rationality and moral rationality to differentiate right from wrong and need reinforcement to adopt virtues influenced by an inner urge other than … Continue reading

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

Salman Ahmed Shaikh The negative effects of ethical emptiness in Capitalism have become more prominent in contemporary economic and financial crises. Lack of an ethical base, unrestrained pursuit of self-interest in production as well as in consumption and interest based … Continue reading

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