Constitutional Economics - CE

DEFINITION of 'Constitutional Economics - CE'

A branch of economics which focuses on the conditions that exist in and choices constrained by the legal framework of a political constitution. Constitutional economics principles are used to estimate how a country or political system will grow economically, since a constitution limits what activities individuals and businesses can legally participate in.

BREAKING DOWN 'Constitutional Economics - CE'

Constitutional economics emerged as a field of study in the 1980s. The field is seen as playing a part in developing countries - and countries that are changing political systems - because it involves the study of how legal frameworks influence economic development. One of the focuses of constitutional economics is the interplay between the economic and political rights of citizens compared to the level of state control of resources and institutions.

RELATED TERMS
  1. Political Economy

    The study and use of how economic theory and methods influences ...
  2. Political Risk Insurance

    Coverage that provides financial protection to investors, financial ...
  3. Political Risk

    The risk that an investment's returns could suffer as a result ...
  4. Limited Government

    A political system in which legalized force is restricted through ...
  5. Economic Conditions

    The state of the economy in a country or region. Economic conditions ...
  6. Development Economics

    A branch of economics that focuses on improving the economies ...
Related Articles
  1. Markets

    What's a Political Economy?

    Economics and politics are intrinsically linked. An economy is frequently one of the biggest points of contention between different political parties. And a political party’s ideologies will ...
  2. Markets

    Evaluating Country Risk For International Investing

    Investing overseas begins with determining the risk of the country's investment climate.
  3. Markets

    Evaluating Country Risk When Investing

    The main risks of investing overseas are economic and political.
  4. Managing Wealth

    How to Invest In Developing Markets

    Developing markets can be attractive additions to many investor's portfolios, but carry additional risks that must be considered.
  5. Markets

    5 Economic Effects Of Country Liberalization

    Liberalization provides new opportunities for diversification and profit.
  6. Investing

    Understanding Smart Beta Sources of Returns

    In part 2, BlackRock explains how Smart Beta beats other active investment strategies.
  7. Markets

    Could 2016 Be the Year the EU Collapses?

    The EU is facing its strongest test since the potential "Grexit." Are pressures now severe enough to break it up?
  8. Markets

    Explaining Limited Government

    Limited government is a political viewpoint that favors few, if any, government controls on individuals and the economy.
  9. Investing

    What is Smart Beta?

    What is Smart Beta? In part 1, BlackRock explains how you can think about investing beyond "active" or "passive."
  10. Trading

    How Global Events Affect The Forex Market

    Learn how politics, war and natural disasters move the forex market, and how you should respond.
RELATED FAQS
  1. What is political risk and what can a multinational company do to minimize exposure?

    For multinational companies, political risk refers to the risk that a host country will make political decisions that will ... Read Answer >>
  2. What is a good annual return for a mutual fund?

    Explore the question of what constitutes a good annual return from investing in mutual funds and the factors that affect ... Read Answer >>
  3. Why do some people claim the Federal Reserve is unconstitutional?

    Learn why some people believe it was unconstitutional for the government to establish the Federal Reserve Bank and why they ... Read Answer >>
  4. What impact does economics have on government policy?

    Learn about the impact of economic conditions on government policy and understand how governments engineer economic conditions ... Read Answer >>
  5. What are some of the limitations and drawbacks of economics as a field?

    Find out why the field of economics is full of controversy. Policy decisions, political campaigns and personal finances are ... Read Answer >>
  6. Who sets fiscal policy, the president or congress?

    Discover how fiscal policy is set in the United States, including how all three branches of government can affect a given ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center