The Effect of Excluding Interest, in an Islamic Economy, on the Rate of Growth of Output and Achieving a Fair Return for Monetary Capital

Abstract

The Islamic economic system, like other economic systems, aims to achieve efficiency in allocating resources. Questions arise about the ability of this system to achieve this efficiency in the absence of interest on monetary capital in this economy, as it is considered usury forbidden in this system. This research studies in a comparative framework with the traditional economy, some aspects of efficiency, analyzing and proving the ability of the Islamic economic system, which excludes interest on capital as it is forbidden usury, to maximize the rate of growth of output and achieve a fair return on monetary capital that financing economic activity.