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Shiavault - a Vault of Shia Islamic Books The Islamic Piety and the Issue of Wealth Introduction All economic schools of thought tirelessly strive to seek a way out of economic distress in order to form a wealthy, prosperous nation possessing the highest levels of education, health, and well-being. However, the pyramid of each school of thought is elaborated upon certain bases that are different from each other.

For instance, highlighting the Paradox of Thrift, the Keynesian perspective explains how stagnation derives from inadequate effective demand in the aggregate good market. Hence, the only appropriate solution to the prospect of chronic stagnation is to employ a sort of expansionary economic policy that can keep effective demand high.

Other schools of thought may evaluate this Keynesian solution as a drain of limited resources diverted to unproductive activities or as a crowding out through which the private sector loses its importance and weakens. Neoclassical economics for one, denies the effectiveness of any kind of artificial policy and its impact on the real economic variables, by rejecting any kind of money illusion or rigidity in the labor market as well as by offering the rational expectation model.

Instead, it underlines the importance of the saving rate as the most significant factor to achieve a higher steady state growth trend. On the other hand, supply side economists ignore both Keynesian and neoclassical approaches and focus merely on all factors that support motivation system of the supplier to increase production, such as the decrease of the tax rate.

More recently, knowledge-based economics puts significant emphasis on human capital, communication as fundamental to knowledge flows, social structures, cultural context and other factors to increase the stock of social capital. In short, since every economic school of thought finds a way of approaching the problem from a different individual angle, there are different analyses of the reality of the economy and hence different solutions and suggestions.

Although each approach reflects a sense of reality and the prescriptions issued by it can remedy some specific economic problems, the more we can synthesize these approaches comprehensively, the more they will reflect reality and the more effective their remedy will appear.