Rajae Aboulaich

This article is concerned with the debate around the economic knowledge evolution and the role of ethics in economy. It reports on the 2008 crisis, the research literature reveals two main problems: the efficiency of the economic modeling and the failure of the ethical system.
The authors explore the use of the new Dynamic Stochastic General Equilibrium “DSGE” model in the case of Islamic economy, it can enable to develop a new approach, taking into account the criticism of the models used before the crisis, and giving more importance to the ethical principles.
The question is to know if the principles of Islamic economy feed into a sustainable economic system.
The characteristic of this model lies in the consideration of Islamic principles, namely the abolition of interest rates and their replacement by the rate of return of the capital. In this perspective, it is supposed that the intervention of the monetary authorities is done by an unconventional approach. The model also distinguishes itself by the integration of Zakat. The model is applied in the case of Morocco.
The results of simulations show that the introduction of these Islamic principles has no negative effects on the macroeconomic and financial conditions of Morocco and that the stability of the economic system is maintained.

The industry of private equity and leveraged buyout has been, since its beginnings, subject to several chapters of bubbles and busts, the majority of whom are initiated under similar circumstances (excess of liquidity, junk debt and mimetic behavior).
The Islamic finance is a financial system that complies with the rules of the Sharia Law, and which naturally allows the achievements of purposes of Sharia, such as protection of property and capital, fair wealth distribution, reduction of uncertainty and speculation, to name a few.
From this perspective, this paper discusses the capacity of Islamic finance to help prevent some factors that trigger financial crises in the leveraged buyout market and to accomplish the intended purposes through this asset class.
In the first part of this paper, the authors try to break down some of these common factors that trigger or catalyze the economic booms of the leverage buyout industry, and propose a framework to visualize their effects through an agent-based Simulation program. The second part of the paper describes how Islamic economic principles constitute brakes to some distortions and excesses in the market, in such a way that the probability of occurrence of a boom decreases drastically. Finally, these Islamic features are added up to the simulation to provide a comprehensive benchmark.