Political Economy

AAA

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.

RELATED TERMS
  1. Pareto Efficiency

    An economic state where resources are allocated in the most efficient ...
  2. Economics

    A social science that studies how individuals, governments, firms ...
  3. Game Theory

    A model of optimality taking into consideration not only benefits ...
  4. Nash Equilibrium

    A concept of game theory where the optimal outcome of a game ...
  5. Pork-Barrel Politics

    A slang term used when politicians or governments "unofficially" ...
  6. Economic Justice

    Economic justice is a component of social justice. It's a set ...
Related Articles
  1. Adam Smith: The Father Of Economics
    Economics

    Adam Smith: The Father Of Economics

  2. 10 Books Worth Investing In
    Investing Basics

    10 Books Worth Investing In

  3. The History Of Economic Thought
    Economics

    The History Of Economic Thought

  4. The History Of Capitalism: From Feudalism ...
    Personal Finance

    The History Of Capitalism: From Feudalism ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center