Can usury be justified?

Article Abstract:

Islamic countries have attempted to establish economies in which financial institutions do not charge interest because doing so is forbidden by the Koran. The inability to charge interest has created economic constraints that have had negative effects on several Islamic countries, including Saudi Arabia. The incidence of usury in West Bengal, India, keeps peasants perpetually indebted to landowners and has inhibited the economic development of the region's agricultural economy. In response to the oil price shocks of 1973 and 1980, Western governments and banks charged lesser developed countries exorbitant interest rates for loans to pay for oil in order to compensate for high expected default rates, which has created a cycle of debt that continues. Usury does create a resource allocation system in the absence of equitable yet feasible alternatives.

Laws, regulations and rules, Saudi Arabia, Developing countries, India, Usury, West Bengal, India

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Islamic economics and islamic political economy

Article Abstract:

The study of Islamic economics began in the Indian subcontinent in the 1930s as scholars strove to create a socio-economic manifesto that reflected Islamic ideals. Subsequently, centers for the study of Islamic economics were established in countries as diverse as Saudi Arabia, Malaysia and Sudan. Unfortunately, the field of Islamic economics remains underdeveloped and is still overly dependent on neoclassical economic models of pricing, resource allocation and consumer behavior. Recently, however, advances in Islamic political economy have helped to rejuvenate the field of Islamic economics.

Editorial, Models, Analysis, Macroeconomics, Neoclassical economics, Islamic economics

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Sweden: political pragmatism unsettles the market

Article Abstract:

Swedish economic policy has been affected by political considerations. The Social Democrats have carried out some reductions in welfarespending, but these have proved unpopular. The government aims to restore some spending, but it is unclear how this can be done without exacerbating the budget deficit. The country has also seen a slowdown in economic growth and some forecasts for 1996 are for growth of less than 1%, while the general trend is for forecasts of under 2%.

Sweden, Economic policy, Budget deficits

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