Introduction to Islamic Economics: Theory and Application -- Contents -- Acknowledgments -- About the Authors -- 1. Economic Systems -- What Is an Economic System? -- Traditional Economic Systems -- Pure Market (Capitalist) Economic System -- Mixed Market (Capitalist) Economic System -- Mixed Socialist Economic System -- Command (Planned) Economic System -- Current State of the Global Economic System -- Growing Income and Wealth Disparities -- Instability of Economic and Financial Systems -- Neglect of Human Welfare Dimension of Economic Development -- Irrational Assumption of Rational Self-Interest Negative Impact on EnvironmentIslamic Economics Paradigm -- Short History of Economic Thought in Islam -- Summary -- Key Terms -- Questions -- 2. Foundation of the Islamic Economic Paradigm -- Meta-Framework and Archetype of Economic Rules -- Implications of the Agent-Trustee Relationship -- Significance of Rule Compliance -- Impact of Scarcity -- Rationality and Freedom of Choice -- Individual Obligations, Rights, and Self-Interest -- Central Notion of Justice -- Shariah: The Law -- Summary -- Key Terms -- Questions -- 3. Institutional Framework and Key Institutions -- Key Institutions -- Property Contracts and Contractual ObligationsTrust -- Markets: The Code of Conduct -- Risk Sharing -- Wealth Accumulation and Utilization -- Wealth Distribution and Redistribution -- Work and Work Ethics -- Competition and Cooperation -- Summary -- Key Terms -- Questions -- 4. The Islamic Economic System -- Social and Economic Justice -- Equality of Opportunity -- Justice in Exchange (Economic Transactions) -- Distributive Justice -- Prohibition of Interest (Al-Riba) -- Risk-Sharing Economic System -- Role of the State -- Summary -- Key Terms -- Questions -- 5. Key Microeconomic Concepts -- Defining Microeconomics -- Issue of Needs versus Wants Consumer BehaviorTheory of the Firm -- Production Cost -- Risk and Profit-Sharing Feature -- Dynamics of Demand and Supply -- Equilibrium -- Role of Markets -- Efficiency versus Equity -- Market Models -- Role of the State -- Summary -- Key Terms -- Questions -- 6. Key Macroeconomics Concepts -- Principal Economic Agents -- National Income -- Consumption, Savings, Investment, and National Income Determination -- National Income and Output Determination -- Inflation -- Unemployment -- Open Economy: Trade in Goods and Services with Other Countries -- Why International Trade Is So Central to Islam Classical Theories of International TradeImplications of Islamic Teachings for International Trade and Economic Integration -- Summary -- Key Terms -- Questions -- 7. Macroeconomic Equilibrium: Characteristics of an Islamic Economy -- Models of an Interest-Free Economy -- Closed Economy Model -- Open Economy Model -- Summary -- Key Terms -- Questions -- 8. The Financial System -- Notion of Risk Sharing -- Building Blocks of the Islamic Financial System -- Islamic Banking System -- Two-Tier Mudarabah -- Two-Windows Model -- Wikala Model -- Liabilities -- Assets.