The good and the bad aspect of financialization of economy in OIC countries
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Throughout the world, the income gap between the rich and the poor continues to widen. This disparity in income has become more obvious in the last two decades as the income of the vast majority of the world's population has been somewhat stagnant over time, while small segments of the population experience an upward trend in income. In a recent report by (Oxfam 2016), it is reported that income inequality is spiralling out of control and this is a dangerous trend that poses significant threat to the global sustainability. Income inequality is not only a problem peculiar to the developed world, but also developing countries such as Muslim countries (OIC countries) as they have in recent times witnessed persistent rise in inequality. Researchers in the field of finance and economics have identified numerous causes of increased inequality. The most commonly cited factors are: Globalization, Openness to trade, declining union power, rising compensation of top management. Recently, increased income inequality is attributed to the financialization of the economy. Financialization is defined as the much faster growth of the financial sector than in the real sector of the economy through rapid growth of debt and large increases in financial sector profits.
Financialization , Economy , Islamic finance , OIC countries
Muhammad Abdulkarim, Fatima. (2016). The good and the bad aspect of financialization of economy in OIC countries. IF Hub, 2 (October 2016), pp. 6-8.