the renaissance of Islamic economic thought is almost entirely lacking in the type of quantitative rigour that would unlock far deeper insights into how the separate parts of the system, so far studied in partial equilibrium, come together and interact. Claims made that economic outcomes dominate those of secular economies have rational conceptual underpinnings, but have not been developed using modern quantitative techniques, particularly DSGE. This project aims to apply DSGE modelling techniques to a stylized Islamic economy in order to understand and quantify the economic outcomes that result from key aspects, including a prohibition of interest, the profit and loss sharing basis of financing arrangements, and the payment of Zakat used to finance welfare for the poor. The DSGE model developed in the project would also be calibrated using actual economic data. Research questions addressed by this project:

• Is an Islamic economic system more resilient than a secular system to shocks? If so, to what extent? Does this resilience depend on the type of shocks?
• Does an Islamic economic system result in a more socially just/equitable distribution of wealth? If so, to what extent? How does the wealth tax change the behaviour of households, firms and the government?
• How does Zakat interact with government taxes on income and influence fiscal policies?
• How should monetary policy be formulated in an Islamic economic system given that interest rates cannot be used to manage inflation, and conventional financial instruments cannot be used to manage the money supply in open market operations?
• Can an Islamic economic system reduce the natural rate of unemployment?
• Do the principles of an Islamic economic system lead to higher growth and greater efficiency?
• How should monetary and fiscal policies be developed for dual economic systems that have both secular and Islamic economic agents and structures?

Nottingham Business School

Nottingham Business School is triple crown accredited with EQUIS, AACSB and AMBA – the highest international benchmarks for business education. It has also been ranked by the Financial Times for its Executive Education programmes in 2023 and 2024. NBS is one of only 47 global business schools recognised as a PRME Champion, and held up as an exemplar by the United Nations of Principles of Responsible Management Education (PRME).

Its purpose is to provide research and education that combines academic excellence with positive impact on people, business and society. As a world leader in experiential learning and personalisation, joining NBS as a researcher is an opportunity to achieve your potential.

the renaissance of Islamic economic thought is almost entirely lacking in the type of quantitative rigour that would unlock far deeper insights into how the separate parts of the system, so far studied in partial equilibrium, come together and interact. Claims made that economic outcomes dominate those of secular economies have rational conceptual underpinnings, but have not been developed using modern quantitative techniques, particularly DSGE. This project aims to apply DSGE modelling techniques to a stylized Islamic economy in order to understand and quantify the economic outcomes that result from key aspects, including a prohibition of interest, the profit and loss sharing basis of financing arrangements, and the payment of Zakat used to finance welfare for the poor. The DSGE model developed in the project would also be calibrated using actual economic data. Research questions addressed by this project:

• Is an Islamic economic system more resilient than a secular system to shocks? If so, to what extent? Does this resilience depend on the type of shocks?
• Does an Islamic economic system result in a more socially just/equitable distribution of wealth? If so, to what extent? How does the wealth tax change the behaviour of households, firms and the government?
• How does Zakat interact with government taxes on income and influence fiscal policies?
• How should monetary policy be formulated in an Islamic economic system given that interest rates cannot be used to manage inflation, and conventional financial instruments cannot be used to manage the money supply in open market operations?
• Can an Islamic economic system reduce the natural rate of unemployment?
• Do the principles of an Islamic economic system lead to higher growth and greater efficiency?
• How should monetary and fiscal policies be developed for dual economic systems that have both secular and Islamic economic agents and structures?

Nottingham Business School

Nottingham Business School is triple crown accredited with EQUIS, AACSB and AMBA – the highest international benchmarks for business education. It has also been ranked by the Financial Times for its Executive Education programmes in 2023 and 2024. NBS is one of only 47 global business schools recognised as a PRME Champion, and held up as an exemplar by the United Nations of Principles of Responsible Management Education (PRME).

Its purpose is to provide research and education that combines academic excellence with positive impact on people, business and society. As a world leader in experiential learning and personalisation, joining NBS as a researcher is an opportunity to achieve your potential.