A margin Note on Medieval Thought about Money and Interest Rate

In the medieval period, the issue of interest was highly significant in economic discussion. Despitea shared vision of money, the Islamic world and Christian West in the late middle ages had differentattitudes to the legitimacy of interest. This divergence has been interpreted by neo-Institutionalisttheory in the light of the religious institutions’ power to influence the economic side of society.Conclusions differ if the analysis comes from a Veblenian Institutionalist perspective. This approachin fact shows that while in Christian Europe interest rate theory developed hand-in-handwith the unfolding of the multiple functions of money in a society gradually evolving towards capitalismand with the secularization of economics, in the Islamic West, partly due to a different developmentof the socio-economic fabric, there were contrasting outcomes both in the role playedby monetary financial institutions and in the developments of theoretical thought.