TOWARD A RIBA-FREE MACROECONOMIC FRAMEWORK: RETHINKING INFLATION AND ECONOMIC BALANCE
DOI:
https://doi.org/10.53828/fw1tdn35Keywords:
Riba-Free Macroeconomic Framework; Inflation; Economic Balance; Islamic Economics; Risk-Sharing Financial MechanismsAbstract
This paper examines the limitations of interest-based monetary policy in managing inflation and maintaining economic balance. While conventional macroeconomic frameworks rely heavily on interest rate adjustments as the primary stabilization tool, such approaches are often insufficient in addressing structural disruptions, supply-side constraints, and behavioural dynamics within the economy. Drawing on Islamic economic principles, this study proposes a riba-free macroeconomic framework that emphasizes real-sector anchoring, risk-sharing financial mechanisms, and strategic alignment among economic agents. By integrating these elements, the paper offers an alternative perspective in which economic stability is achieved through structural and institutional design rather than reliance on interest-based instruments. The findings suggest that a riba-free system provides not only a normative foundation but also a conceptually coherent approach to managing inflation and promoting sustainable economic balance.
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