INTERNATIONAL ISLAMIC UNIVERSITY CHITTAGONG

Department of Business Administration Course Title : Principles of Islamic Economics Course Code : ECON-2403
Objective of the Course The aim of the course is to provide a conceptual framework of Islamic Economics. The course is designed to enable students to understand how Islam and Islamic worldview permeate all aspects of life including economics. The basic premise of this course is that the study of Islamic economics proceeds from the Islamic worldview and has to be developed according to a methodology that is founded upon this worldview. Since economics deals with various aspects such as production, consumption, distribution, factors of production, pricing of factors, market strategies etc., all these areas will be dealt within the course in Islamic perspective. Moreover, the Islamic public finance i,e zakat and Islamic banking system will also be covered in the course with due emphasis . Furthermore, a comparative analysis of different economic systems will also be made in the course so as to enable the students to formulate ideas regarding Islamic economics in its truest perspective.

COURSE OUTLINE
Mid Term Examination 1. Introduction: Definitions , development of Islamic economic thought, Islamic Economic Worldview, Basis of Islamic economics, goals or objectives of Islamic economics, assumptions of Islamic economics, main sources of knowledge of Islamic economic study, importance of Islamic economics. Comparative Economic System: Laissez faire economy, market economy, command economy, mixed economy, differences between Islamic economy and capitalist economy. 2. An overview of microeconomics in an Islamic frame work i) Consumer Behavior in Islam: Some basic concepts: need vs demand, Islamic concept of need, want-utility vs need-maslahah, Characteristics of consumer in an Islamic economy, differences between capitalist and Islamic consumer's behavior, Objectives of consumption in Islam, Theory of consumer behavior in Islamic economics: Monzer Kahf Model and its differences with conventional theory of consumer behaviour. Derivation of Final Spending Function, Shifts in the Final Spending Function. ii) Market Mechanism from Islamic Perspective: Islamic theory of effective needbased demand and potential capacity- based supply, Market Mechanism: Determination of Price and Quantity, Islamic Approach to Market Prices- Islamic pricing policy- Three policy options: Desirable policy option in Islam. iii) The Theory of Production in Islam: Objectives of Production, the goals of the firm- Profit Maximization VS Sales Maximization, Factors of Production and Their Pricing: Islamic Perspective. Characteristics of an Islamic Firm, Theory of Islamic Firm: Metwally Model, Differences between firms in an Islamic society and in a non-islamic society, understanding of the concept of profit and profit share in Islam. Satisfying behaviour, Advertising in Islam. Final Examination iv) Market structure in Islam: Monopoly market and Islam characteristics of a monopolist in Islam, price-quantity relationship of a monopoly market in an Islamic perspective, price discrimination and Islam, Covering Loss through price discrimination, Oligopoly market and Islam definition of oligopoly market and its characteristics, kink demand curve in an oligopoly market and Islamic perspective.

3. An overview of macroeconomics in an Islamic frame work: i) Consumption function in Islam: Concept of Consumption in Islam, Consumption Function in Islam, Determinants of Islamic Consumption Function, Debates regarding APC and MPC- Model of M. A. MANNAN, Expected Desirable income hypothesis and Consumption, Aggregate Consumption Function. ii) Riba or Interest and Profit Loss Sharing System: Definition of riba, different concepts about riba, characteristics of riba, types of riba, Arguments for Riba or Interest in Conventional Economy, Reasons behind Prohibition of Riba in an Islamic Economy, Profit: How is it different from Riba? Saving and Investment Behaviour in Islam: Saving and Investment Decisions, Profit-Loss Sharing System- Its superiority over interest based system. iii) Islamic banking system: Problems of Traditional Banking System, Concept of Islamic banking, emergence of Islamic banking system, features of Islamic banking, Functions of Islamic banks, objectives of Islamic banking, Contributions of Islamic Banks towards Socio-economic development. differences between traditional banking and Islamic banking, sources and uses of funds of Islamic bank, financing systems of Islamic bank. iv) Public finance in Islam Zakat : Zakat and Islam What is zakat and why is zakat? Principles of Zakat. Differences between Zakat and capitalist tax system, Basis of Zakat: Nisab and the rate of Zakat, Inflation and Zakat objectives of Zakat moral, religious and socio-economic objectives, Zakat recipients, the role of state in Zakat collection and distribution. v) Law of inheritance in Islam and its significance. C.RECOMMENDED BOOKS: Sayyid Tahir, Aidit Ghazali, Syed Omar Syed Agil M. A. Hamid Texts Readings on Microeconomics: An Islamic Perspective Islamic Economics An Introductory Analysis

References Longman , Kuala Lumpur , Malaysia Readings in microeconomics M.A. Mannan Islamic Economics Theory and Practice Reference Journals Thoughts on Islamic Economics Islamic economics research bureau The journal of Islamic Economics International Islamic University , Malaysia D. Marks Distribution : Class test , assignment and attendance 20% Mid Term Examination (duration 90 minutes) 30% Final Examination (duration 2 hours and 30 minutes) 50% Total 100% Course Instructor: ABDULLAHIL MAMUN, Assistant Professor, DBA, IIUC. Cell: 01712138373 e-mail: ahm_economics@yahoo.com