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Interest, Riba and its Prohibition, from the Economic Viewpoint
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Abstract: (20296 Views) |
| Abstract Elimination of interest from the banking system and financial markets in Islamic economy is an effective step in achieving economic growth and scope of the damaging effects of interest. Many studies show that interest has a harmful impact on the economy including the limiting of production level, and employment, provides one of the causes of unfavorable distribution of income in society. In order to keep the market economy in optimal position, a number of capitalist economists have suggested that, it is necessary to keep the interest rate on zero. According to Keynes, interest rate is one of the main factors of recession and instability in economic systems, although it is accounted as a key macroeconomic variable in capitalist system. Hence, the issue of interest rate and money market and its impact on macroeconomic variables have been a matter of debate for several economists. In this paper, it is attempted to compare this issue in terms of its harmful consequences in Capitalist economic system, with Islamic economics, which is based on a system of interest free. To do so, the comments and the views of Capitalist economists and their justifications are evaluated. |
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| Keywords: Interest, Riba, Islamic economics |
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Full-Text [PDF 413 kb]
(1866 Downloads)
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Article type: Research |
Subject:
General
Received: 2015/08/23 | Accepted: 2015/08/23 | Published: 2015/08/23
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