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Article
Publication date: 23 August 2013

Yasushi Suzuki

This paper aims to draw the wisdom of the prohibition of Gharar through the lens of institutional and Post‐Keynesian economics.

1520

Abstract

Purpose

This paper aims to draw the wisdom of the prohibition of Gharar through the lens of institutional and Post‐Keynesian economics.

Design/methodology/approach

This research applies the theoretical contributions of the Post‐Keynesian economics and the new institutional economics to clarify the dimensions of Islamic Gharar. This research attempts to see the divergence between theory and practice, looking at empirical data including the information from an interview with one of Indonesian Islamic banks.

Findings

The lens of institutional and Post‐Keynesian economics is useful to clarify two dimensions of Gharar; incompleteness of contracting and fundamental uncertainty associated with business. As for the latter dimension of Gharar, the tradition of Post‐Keynesian economics can distinguish “animal spirit in speculation” and “animal spirit in enterprise”, the latter of which should be carefully considered. However, the interview reveals a kind of difficulty for Islamic financial institutions to tackle “Murabaha syndrome”.

Research limitations/implications

This research supports an opinion such that Islamic financial institutions are not necessarily discouraged to share the associated uncertainty with the small‐sized firms in the agricultural and industrial sector, so far as their “enterprise” is based on the Islamic business ethics.

Originality/value

Despite very significant discussions in the literature on the prohibition of Gharar as a fundamental principle of Islamic finance, less has been done to elaborate upon it through the lens of Post‐Keynesian economics which have greatly contributed to shedding analytical lights on “uncertainty”.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 6 no. 3
Type: Research Article
ISSN: 1753-8394

Keywords

Content available
926

Abstract

Details

International Journal of Social Economics, vol. 32 no. 5
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 13 February 2009

Susan Schroeder

The purpose of this study is to investigate why “financial fragility” carries different definitions in the economic literature. This is a useful task as the detection of…

1411

Abstract

Purpose

The purpose of this study is to investigate why “financial fragility” carries different definitions in the economic literature. This is a useful task as the detection of “financial fragility” depends, in part, upon how one defines it. According to Post Keynesian economists, financial fragility is a process that can culminate in financial instability (an event). For mainstream or New Keynesian economists, financial fragility has been traditionally defined as a state in which a shock can trigger instability. More recently, however, mainstream economists have recast their definition as a particular form of financial instability – an event. Each definition of financial fragility is intimately linked to the theoretical foundation upon which it rests. This carries important implications for the ability of policymakers to assess and manage the health of an economy.

Design/methodology/approach

The different approaches to the definition and detection of financial fragility are compared using corresponding sets of indicators. Indicators for the Post Keynesian approach are derived from a simple cash‐flow accounting framework, in the spirit of Hyman Minsky. The economy selected for study is New Zealand.

Findings

According to the Post Keynesian approach, New Zealand has been in a financially fragile state for over three years, a period during which policymakers could have been creating ways to make New Zealand more resilient to the onset of instability. According to the New Keynesian approach, New Zealand may just now be experiencing fragility, giving policymakers much less time to react.

Originality/value

This study traces the definitions of financial fragility to their underlying theoretical frameworks and draws the implications for the methods of detecting financial fragility.

Details

International Journal of Social Economics, vol. 36 no. 3
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 February 1992

William A. Jackson

Population ageing has been seen as creating economic problems,which are often described as a worsening intergenerational conflict forresources. A rising demographic dependency…

Abstract

Population ageing has been seen as creating economic problems, which are often described as a worsening intergenerational conflict for resources. A rising demographic dependency ratio is said to increase the “burden” on the working population, by forcing sacrifices in their consumption. Such apparently intuitive ideas are based on the assumption of a binding aggregate resource constraint, as would occur if resources were fully utilized. From a post‐Keynesian perspective, however, unemployment and excess capacity are normal to the functioning of capitalist economies, and resources are not in general fully utilized. Argues that the Keynesian process of national income determination precludes any immediate relationship between population ageing and the “burden” imposed on income recipients. Below full employment, a rising dependency ratio is not guaranteed to reduce the expenditure share of income recipients or raise their tax rates. An exclusive emphasis on intergenerational conflict can give a misleading impression of the consequences of population ageing.

Details

Journal of Economic Studies, vol. 19 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 1 March 1996

Bill Gerrard

Using recent literature, examines developments in seven macroeconomic schools of thought: orthodox Keynesian, monetarist, new classical, real business cycle theory, new Keynesian…

4178

Abstract

Using recent literature, examines developments in seven macroeconomic schools of thought: orthodox Keynesian, monetarist, new classical, real business cycle theory, new Keynesian, Austrian and post‐Keynesian. Describes all of these and classifies them as orthodox, new or radical. After setting out the differences, discusses the degree of agreement between the schools of thought. Concludes that macroeconomics is constantly evolving, resulting in new disagreements requiring a new consensus.

Details

Journal of Economic Studies, vol. 23 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 1 February 1979

THANOS SKOURAS

This paper presents, both diagrammatically and algebraically, a two‐sector model that exemplifies and shares some of the basic characteristics to be found in the work of Kalecki…

Abstract

This paper presents, both diagrammatically and algebraically, a two‐sector model that exemplifies and shares some of the basic characteristics to be found in the work of Kalecki, Joan Robinson, Kaldor and, in general, the “Post‐Keynesian” school of writers.

Details

Journal of Economic Studies, vol. 6 no. 2
Type: Research Article
ISSN: 0144-3585

Article
Publication date: 8 March 2011

Marina Dabic, Vladimir Cvijanović and Miguel González‐Loureiro

In order to explain change and growth at the aggregate levels, three levels: macro, meso and micro must be taken into account. Applying the theories from Keynesian and…

2983

Abstract

Purpose

In order to explain change and growth at the aggregate levels, three levels: macro, meso and micro must be taken into account. Applying the theories from Keynesian and post‐Keynesian economics (PKE) best explains the macro level and applying those from Schumpeterian and neo‐Schumpeterian economics (NSE) best explains the micro level. Besides this, the meso level can be further explained by merging both post‐Keynesian and neo‐Schumpeterian theories. Such a unifying approach has been missing from the literature so far. Bringing these schools of thought together is important for mutual learning and further development of innovation theory. This paper aims to effect this.

Design/methodology/approach

The paper presents a survey of the relevant secondary literature of the aforementioned schools of thought, identifying their methodological practice and key contributions to innovation theory.

Findings

A combination of these schools of thought offers a richer approach to studying innovation. It is found to exist in particular in the evolutionary, institutional and long‐run perspectives, in combination with emphasis on the role of finance in production.

Research limitations/implications

One is invited to develop one's own theoretical and empirical approach that combines the advantages of all the schools of thought presented.

Originality/value

The paper is exploratory, as it reconsiders how a comprehensive approach to studying innovations can be built. It examines the existing literature. It will be of value to researchers in innovation.

Details

Management Decision, vol. 49 no. 2
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 1 January 1990

Thomas O. Nitsch

The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption. In…

Abstract

The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption. In fact, it was precisely the inequality in the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvements which distinguished that age from all others. … The immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war, could never have come about in a Society where wealth was divided equitably. [Sic!] — John Maynard Keynes, The Economic Consequences of the Peace (1919/20; Chap. II, sec. III), “Europe before the War,” “The Psychology of Society.”

Details

Humanomics, vol. 6 no. 1
Type: Research Article
ISSN: 0828-8666

Book part
Publication date: 31 December 2000

Costas Lapavitsas and Alfredo Saad-Filho

This chapter critically examines the Post Keynesian horizontalist theory of money from a Marxian perspective. Horizontalist analyses are criticised from three angles. First…

Abstract

This chapter critically examines the Post Keynesian horizontalist theory of money from a Marxian perspective. Horizontalist analyses are criticised from three angles. First, monetary theory should be historically specific. Second, credit money is an advanced form of money, created mostly as liabilities of financial institutions, and its supply is endogenous in a more complex and profound sense than Post Keynesian analysis allows. Third, although credit money is endogenous, the quantity supplied is not always compatible with the needs of the sphere of circulation. Consequently, pronounced instability and inflation are possible for purely monetary reasons.

Details

Value, Capitalist Dynamics and Money
Type: Book
ISBN: 978-1-84950-572-7

Book part
Publication date: 1 January 2000

Abstract

Details

Twentieth-Century Economics
Type: Book
ISBN: 978-0-76230-654-1

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