The main purpose of Islamic economics is not to improve economic performance. Notwithstanding the claim that Islamic economics provides a superior alternative to the secular economic doctrines of the time, its real purpose is to help prevent Muslims from assimilating into the emerging global...

Even when inflation is perfectly predictable, a firm for whici price adjustment is costly will keep its nominal price unchanged for extended periods. At least part of the time, therefore, the firm's real price will diverge from the price that maximizes its instan- taneous profits. In the...