Rethinking the Essence of Macroeconomic Policies in the Iqtiṣād Paradigm

Nabil El Maghrebi (), Abbas Mirakhor (), Tarık Akın and Zamir Iqbal ()
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Nabil El Maghrebi: Wakayama University
Zamir Iqbal: Islamic Development Bank

Chapter Chapter 8 in Revisiting Islamic Economics, 2023, pp 285-326 from Palgrave Macmillan

Abstract: Abstract Given the growing evidence that risk-transfer arrangements constitute an important driver of economic inequalities, there is a need for viable redistribution mechanisms based on the organizing principle of risk-sharing. Indeed, the redistribution proposals by mainstream economic thinking may not be sufficient to mitigate the ever-increasing wealth inequality. In contrast, risk-sharing agreements can provide remedies to the inherently unstable interest-based financial systems and ensure effective redistribution mechanisms. The ideas of asset-based redistribution and risk-sharing universal basic assets are potential substitutes for current redistribution proposals. For instance, the Public Basic Asset Fund, a blueprint for the implementation of asset-based redistribution and risk-sharing universal basic assets, provides opportunities for investment in the real economy and for the generation of stable income from development projects. Thus, it is important to rethink the essence of macroeconomic policies as both fiscal and monetary policies used to regulate economic activity based on the very interest-based mechanism that promotes economic rents, cannot arguably be part of the solution to the problem of economic inequalities.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psibcp:978-3-031-41134-2_8

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DOI: 10.1007/978-3-031-41134-2_8

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