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.