Political Economy

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DEFINITION of 'Political Economy'

The study and use of how economic theory and methods influences political ideology. Political economy is the interplay between economics, law and politics, and how institutions develop in different social and economic systems, such as capitalism, socialism and communism. Political economy analyzes how public policy is created and implemented.

INVESTOPEDIA EXPLAINS 'Political Economy'

Because various individuals and groups have different interests in how a country or economy is to develop, political economy as a discipline is a complex field, covering a broad array of potentially competing interests. Political economy also involves the use of game theory, since groups competing for finite resources and power must determine which courses of action will give the most beneficial results, and what the probability of those results being reached are.

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RELATED FAQS
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    The proper role of government in a capitalist economic system has been hotly debated for centuries. Unlike socialism, communism ... Read Full Answer >>
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    Capitalism and free enterprise are often seen as synonymous. In truth, they are closely related yet distinct terms with overlapping ... Read Full Answer >>
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    Economics is a social science that examines how people produce, distribute, and consume goods and services. This means that ... Read Full Answer >>
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    Cambrists (sometimes seen as "cambists," although the two terms aren't completely synonymous) are experts in the field of ... Read Full Answer >>
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