Thesis

The foundation of Islamic economics is explored in this thesis. Rational behavior in Muslim society is explored and principles of Islamic jurisprudence is analyzed.

This dissertation results from the author's belief that Muslims are confused with regard to Islamic budgeting principles. The macroeconomic ideas of

This thesis, in three essays, discusses the absence of interest in Islamic financial transactions as the central feature of Islamic economics. Profit and loss sharing arrangements where risk is shared between lender and borrower replace traditional Western financial methods of lending. Moral hazard problems were believed to eventually cause a decline in the savings and investment rate. The author uses incentive theory in the first essay to formulate profit and loss sharing contracts between investors and for both moral hazard and adverse selection.

The question posed in this study is whether the finance practices of the IDB conform with Islamic principles of finance and banking, as stated in the provisions of the IDB's charter. The author conducts an analysis of these activities focusing on the modes of financing adopted by the IDB to promote social and economic progress in member countries. Despite religious and economic commitments, the IDB's operations are not in accordance with the self-imposed guidelines stated in its charter.