Woodford even titled his 2003 book as “Interest and Prices” to underline the relation to Wicksell. [5] Monetary aggregates were substituted by interest rates as the monetary instrument of choice, with monetary policy subject to a quantitative inflation target.
Trading and partnership or joint venture arrangements are thus the appropriate risk-reward paradigms. Another underpinning of Islamic finance is the tenet that financial transactions should be supported by genuine productive economic activity that subscribes to the ethics of the Islamic faith.