Fiscal And Monetary Policy In Islamic Economics

Abstract

This study aims to analyze the concept and implementation of fiscal and monetary policies in Islamic economics and their role in achieving economic stability and social justice. Fiscal policy in Islamic economics focuses on the management of state revenues and expenditures derived from instruments such as zakat, infaq, sadaqah, and taxes in accordance with Sharia, with the primary goal of improving public welfare and equitable distribution of wealth. Meanwhile, monetary policy in Islamic economics emphasizes controlling the money supply without using interest (riba), but rather through profit-sharing instruments such as mudharabah and musyarakah. The research method used is library research, reviewing various scientific literature related to Islamic economics. The results show that fiscal and monetary policies in Islamic economics have distinct characteristics from conventional systems, particularly in the prohibition of usury, the emphasis on distributive justice, and the orientation towards the welfare of the community. Optimal implementation of these two policies can create economic stability, reduce social inequality, and support sustainable economic development.