A Comprehensive Macroeconomic Income Determination Model for an Islamic Economy

Muhammad Hussain

Abstract


Several attempts at modelling the income determination process
in an Islamic Economy have been made.l Almost all of these attempts are
related to income determination on the demand side of the economy only.
To the best of my knowledge no attempt has so far been made to capture
the supply-side effects on income determination. Some early Muslim
thinkers like Ibn Khaldun (1980) have emphatically stressed the
supply-side effects on income determination in a Muslim economy. The
main objective of this study is to make an effort to present a
comprehensive macroeconomic income determination model for an Islamic
economy that takes care of the demand side as far as the goods markets
and money markets are concerned and it also covers the supply side of
the economy as far as the optimal conditions for hiring of the labour
and capital in the factor markets are concerned.

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DOI: https://doi.org/10.30541/v33i4IIpp.1301-1314

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