Photo: Loretta Napoleoni (Zocalo Saltillo) the Werstern economy is collapsing and the only alternative solution is the Islamic financial system Loretta Napoleoni is an Italian journalist and political analyst. Her writing appears regularly in many journals and publications, including several European newspapers. She has worked as a foreign correspondent and columnist for several Italian financial [...]

Agency conflict arises when the various parties have different incentives or objectives in a mutual relationship. Two main agency conflicts in commercial context are: Between shareholders and managers Between shareholders and creditors In the first agency conflict, the managers appointed by the shareholders may work in a manner that increases their own welfare, but which [...]

Credit Image: Xchng Stock Salman Ahmed Shaikh It is a fact that income inequality even in developed countries is high and has been increasing despite sustainable growth experienced in growing East Asian countries and also in Europe and North America in general. One of the explanations often given for presence of income inequality is that [...]

Production function in economics explains the functional relationship between inputs and output. Whatever mathematical form the production function takes, i.e. Cobb Douglas, Constant Elasticity of Substitution etc, the basic ingredients of any production function are inputs and how they relate with output. The most commonly taken inputs are Labor (N) and Capital (K). Total Factor Productivity (TFP) is the summary measure of the impacts of other inputs, social and legal infrastructure and the technological change. Below, we summarize the impact of Islamic Economics principles on the production function in an economy.

Credit Photo: Xchng Stock Scarcity is the basic premise on which classical and neoclassical economics is based. It implies that resources are scarce relatively as compared to wants that are unlimited. But, this premise uses the word ‘wants’ in a general sense which includes both necessities and luxuries that people desire to have. Nobel laureate [...]