Abstract

The development of Islamic economics has been profound over the last twenty years. The excellent survey of Muslim Economic Thinking by Mohammad Nejatullah Siddiqi (Ahmad 1980) demonstrates the progress that has been made in every avenue of economic thought; the recent work by M. Khan and A. Mirakhor on Islamic Banking in Pakistan and Iran represents the first major study to quantify the effectiveness of an Islamic monetary system. The book by Dr. Umer Chapra, Towards a Just Monetary System, which is the subject matter of this review article, is an attempt, or so we are told by Khurshid Ahmad in the preface, to provide a "comprehensive and interpretative study of the Islamic monetary system" (P. 12), to "integrate theory and practice" and to "give a vigorous analysis of some key concepts" (P.13) in Islamic monetary economics. The reader is therefore given very high expectations of the book as the beginning of the fourth phase of Islamic economies - "a more integrative as well as more critical approach to the entire theory and practice of money and banking in Islam" (P.11). If these expectations are fulfilled Chapra has claim to pioneering work in Islamic macroeconomics but is this the case?