Capital Market Equilibrium in the Islamic Economy

This paper by modeling the behavior of economic agents in an Islamic economy and develop a general equilibrium model investigates the capital market equilibrium in an Islamic Economy. Accordingly, have tried to determine the capital market regulator variable, by determine the affecting factors on supply and demand of capital in an economy without interest. According to result, in compared with an economy with interest, that determined exogenous interest rates in the money market is regulator for capital market, variable profit sharing ratio of families in the productive partnership is earned as a capital market endogenous regulator variable in an economy without interest. Also in this article, capital market equilibrium point, maximum production point of producers is obtained, which means more investment in an economy interest-free to the economy is with interest.