Abstract
An attempt has been made to provide micro economic foundation for a macroeconomic system based on Islamic financial principles. Using a Ricardo type corn model in a deterministic framework, some aspects of investment and income distribution pattern under a financing system similar to Mu sharka finance arc analyzed and compared to the traditional fixed interest system. It is shown that without any clement of uncertainty, the interest system, unlike the equity system, is Pareto optimal. Implications of the results for Islamic banking are discussed, and mode of government intervention is suggested which can make the equity finance system more efficient.
Shamim Ahmad Siddiqui, Asad Zaman. (1989) INVESTMENT AND INCOME DlSTRIBUTION PATTERN UNDER MUSHARKA FINANCE: The Certainly Case, Pakistan Journal of Applied Economics, Volume-08, Issue-1.
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