What Political Economy Is.....

Political economy is a social science that studies production, trade, and their relationship with the law and the government..... 

It is the study of how economic theories affect different socio-economic systems such as socialism and communism, along with the creation and implementation of public policy.

 

Political Economy

 

Different groups in the economy adhere to their own theory on how the economy should be developed; hence, political economy is a complex field that covers a broad range of political interests. In simple terms, political economy refers to the advice given by economists to the government on either general economic policies or on certain specific proposals created by politicians.

 
Components of Political Economy

Political economics is split into two sections: Classical Political Economy and Modern Political Economy. Classical Political Economy studies the works of philosophers such as Machiavelli, Adam Smith, and Karl Marx. Modern Political Economy, on the other hand, studies the work of modern philosophers, economists, and political scientists such as John Maynard Keynes, Milton Freidman, and Friedrich Hayek.

The study of political economy is influenced by game theory, as it involves different groups competing for finite resources and power that assess which policies will provide the most beneficial results. It also relates to the capability of the economy to achieve the desired results. The study of political economy focuses on three major areas:

 
1. Interdisciplinary study

From an interdisciplinary standpoint, political economy focuses on economics, sociology, and political science to understand how economic systems, political institutions, and the environment affect and influence each other. The three areas in interdisciplinary study include economic models of political processes, the international political economy and how it affects international relations, and resource allocation in different economic systems.

 
2. New political economy

The new political economy area treats economic policies as a belief or action that must be further discussed rather than as a framework that needs to be analyzed. It unites the ideologies of classical economics and new advances in the field of politics and economics. The approach dismisses old ideals about agencies and the interest of states and markets and aims to encourage political debates about societal wants and needs.

 
3. International political economy

International political economy study, also known as global political economy, analyzes the relationship between economics and international relations. It uses ideas from economics, sociology, and political science. International political economy focuses on how states and institutions use global economic interactions to shape political systems.