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Islamic Economics as a Solution to Strengthen Economy

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  1. Introduction
  2. Islamic Economics
  3. Solution to Strengthen Economy
  4. Discussion
  5. Conclusion

The financial crisis lately become more common since the era of globalization. Countries are experiencing a crisis not only in Latin America, Asia, Europe, but also hit the United States. U.S. financial crisis spread to various countries including Indonesia. Almost all countries that apply the system of capitalism experienced a financial crisis.

One major reason is the advancement of the global crisis in the information technology wave of the crisis and accelerate enlarge its spread to other countries. Another reason is the rapid development of the financial sector. Edison et al (2002) explains that because the financial system is integrated, the domestic financial disruptions in one country can lead to a domino effect with other integrated way economic mess that led to the global financial turmoil.

Some literature suggests that financial instability can also be caused by the role of international capital flows through international transmission, such as the pattern of trade, exchange rate pressures and foreign investment that causes the contagious effects (Chongvilaivan 2010).

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