Rigorous mathematical techniques are used to compare the Islamic financial system based on variable return scheme (VRS) with the traditional one based on fixed return scheme (FRS). It is shown, under certain assumptions which include risk aversion on the part of investors, that the Pareto...

The existing literature on Islamic economics has not undergone any of the processes of verification or falsification. It is mostly restatement of the postulates as found in the Qur'an or hadith. The literature on methodology of Islamic economics is either superfluous, or ambiguous or confusing....

This paper answers briefly basic questions on how an Islamic zero-interest-rate economy (ZIRE) allocates, through the market, real and financial investments. Questions addressed include: What is the meaning and scope of the zero-interest imperative? Wouldn't zero-interest regime deprive an...