Preface; Contents; List of Figures; Part I Islamic Finance: Rationale, History, Instruments and the Legal Framework; Reference; 1 Introduction; 1.1 Overview; 1.2 The Two Worlds of Finance; 1.3 The Rationale of Islamic Finance; 1.3.1 The Development of Islamic Banking Worldwide; 1.3.2 IBF in the Middle East;...

This book provides researchers and students with an understanding of the basic legal tenets of the Islamic finance industry, studying the real economic effects of those tenets using the tools of the modern economic theory. Split into four parts, the book begins with an introduction to the...

In this paper we consider how social norms affect economic performance, using example of an Islamic bank providing a business loan to an entrepreneur. We show that the ability to rely on social norms mitigates the moral hazard problem, but introduces rigidities that prevent optimal response to...