PROVING AL-MAQRIZI’S CONCEPT OF THE DETERMINANTS OF INFLATION: CROSS BORDER ANALYSIS

Abstract

This research discusses the determinants of inflation according to Al-Maqrizi, one of
Ibnu Khaldun’s disciples. He argued that inflation is caused by natural and human
error factors; the latter include government corruption and the excess supply of
non-metal money. This study conducts a critical review of the work of al-Maqrizi,
ighatsatul ummah bi kasyfil ghummah, supported by a panel data regression of
cross-country data related to rates of inflation, rates of corruption and the number of
natural disasters. The empirical data show that the rate of inflation is positively related
to human error factors: corruption, tax and money supply. The results indicate the
relevance of al-Maqirizi’s postulates to the modern day economy. However, natural
disasters are not proven to be a significant factor for inflation at the country level. This
paper contributes to the importance of the study of classical Muslim scholars’ thinking
in order to understand current economic problems and ways of solving them.