Machine summary:
Although the proposed Interest-Free" monetary system is based on the principle of competitive markets (Tekir, 1989), it has no explanation for the extent of government's involvement in the macroeconomic activity.
(1) The "Mudaraba" contracts will replace the traditional bond-financed method of borrowing by government.
This will be an equivalent of the stock market, which shows the strong, speculative element worldwide, an activity discouraged by Islamic economics.
S. and worldwide in 1987 and 1989, shows that the "Mudaraba" market will have to be modified to reduce the element of speculation.
Lastly, Anwar's claim that interest rates are negatively associated with budget deficits lacks empirical evidence.
There is some evidence (Volker 1984) that budget deficits tend to push interest rates up.
"Modelling Interest-Free Economy: A Study In Macro-Economics and Development" (Herndon, VA: International Institute of Islamic Thought, 1987).
"Modelling Interest-Free Economy: A Study in Macro-economics and Development": Comments, The American Journal of Islamic Social Sciences, Vol. 6, No. 2, 1989, pp.