Abstract:
Investment, a critical issue in macroeconomics, depends upon rate of interest. Closely related to investment in macroeconomics are equilibrium and sustainability. This paper aims at using an analytical method to identify an interest-free macroeconomic model as opposed to capitalist macroeconomic models. The main premise of present Paper is that this model is sustainable in the same manner as models dependent upon interest rate. Furthermore, proposed model is even more sustainable than the macro-model of Sargent. In order to achieve viable models in an interest-free system, changes were made to a chosen model. Proposed model entails alterations in labor demand, production, consumption, and investment functions as well as equilibrium in the labor market. Since during rising inflation in an interest-free system, the true rate of return for monetary assets is preserved, the motivation for savings is not weakened. Thus, for developing countries faced with inflation and its resulting stagnation, it is preferable to substitute monetary systems based on interest with interest-free systems.
Machine summary:
"Using historical analysis, three methods of distribution have been determined including (1) immediate, equal distribution of public wealth by the Holy Prophet (S), the first caliph, and Imam Ali (‘A); (2) biased annual distribution by the second caliph; and (3) amassment of public treasury and arbitrary expenditure by the majority of later rulers of the Muslim people.
Key Words: Bayt al Māl (Treasury), Economic History of Islam, the Holy Prophet, Imam Ali, the three caliphs, Equal Distribution, Biased Distribution.
Culturo-Economic abnormality of Iran’s Tax Revenues and Solutions based on Islamic Teachings Hasan Aghanazari 1 * Doubtless normality of taxation in every society is dependent on formation of suitable, especially cultural, infrastructure.
After presenting the theoretical and practical principles of consumption, the following four important strategies have been offered as methods to correct consumption paradigms in the society: heightening public awareness and correcting media orientations; introduction of superior paradigms; correction of the price system; and implementation of appropriate standards and programs.
Key Words: Religious Capital, Social Capital, Free Riding, Adverse Selection, Moral Hazard."