Investment and Saving
This chapter is composed of two main parts; the first is a presentation of a model for savings and investment decisions in an interest free economy. This model is constructed with the help of a new observable variable that is determined in the capital market. Subsequently, factors that affect savings and investment functions are discussed. The second part deals with the outcomes of eliminating Riba from the economy. A discussion of the impacts of implementation of this rule on the real and financial sector of the economy concludes the chapter.
KeywordsCapital Market Good Market Initial Endowment Spot Price Future Consumption
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