This paper analyses the feasibility of profit and loss sharing (PLS) contracts in presence of moral hazard between the principal (financier) and the agent (entrepreneur). It shows that introducing a rule for sharing profits and losses in contingence with the outcome of the entrepreneur’s...

The relationship between economic development and income inequality is not neutral vis-à-vis the role of the financial system in responding to the needs of different categories of agents. Indeed, as shown by the literature of the persistent inequality (e.g. Banarjee and Newman, 1993; Piketty,...

This paper compares profit sharing and debt contracts in presence of moral hazard. Its originality relatively to the existing studies consists in performing the comparison between the two contracts in a more general context. Firstly, the internal funds of the agent (entrepreneur) are enabled to...

This paper discusses how profit and loss sharing ratios will be determined at the micro and micro levels in an interest free system of financing business operating side by side of an interest based conventional financing.It shows that leverage magnification of return on owners' equity is also...

The argument that modern economies cannot function without interest is examined in detail. We show that Islamic alternatives to interest, which vary with the context and the type of loan, provide adequate substitutes. Interest based institutions lead to many types of difficulties both practical...

We study the stability issue in a Cournot duopoly with codetermined firms. We show that when both firms codetermine employment together with decentralised employees’ representatives, a rise in wages acts as an economic de-stabiliser (stabiliser) when the wage is fairly low (high), while under...

This paper, presented at the Laboratori per la Critica Sociale organised by the Centro Studi Transformazione Economico-Sociali (CESTES-PROTEO), is the English language version of ‘The age of war: From world market to world conquest’, presented at the Forum on the Theoretical analysis of the...

Prepublication version of ‘When things go wrong: the Political Economy of Market Breakdown’ in Westra; R and Alan Zuege (Eds) (2003) Value and the World Economy Today: Production; Finance and Globalization; pp91-118. London:MacMillan; ISBN: 1 40390 002 7 This paper constructs a theoretical...