Yazar : Zaidi Iqbal

Stabilization and Growth in an Open Islamic Economy

Paper presented to the International Seminar on Islamic Economics for University Teachersiorganised by I.I.I.E. in August-—September 1987. Presents a simple model on the pattern. of Tobin and Brainard for an open Islamic economy, operating without interest. In the absence of interest, the authorities can alter the required rate of return on physical capital thereby affecting investment and output. Both savings and investment are likely to increase in an Islamic economy so that the effect on the current account position is ambiguous. However, the Islamic financial system has some advantages over the conventional interest-based system in terms of adjustment to certain specific types of macro-economic disturbances. Mathematical. For economists only. Documented.