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Political Economics

Political economics was first used to describe the study of production, buying and selling, government relations, and the distribution of national income. It is the intersection of economics and politics. Political economics discusses capitalist, socialist, and mixed economies and how they influence each other. Today, political economics mostly studies political trade offs and their effect on the economy.

The political economy is categorized into three subareas¹:

1. The government’s role or influence in resource allocation for the different economy systems

2. International political economy, which studies the economic impacts of international relations

3. Economic models of political processes  

Political economics is often associated with rational-choice assumptions, typically found in game theory and also examines government failure. Political economics branches off into different areas such as new political economics and international political economics. Rational choice theory is a large topic in political economics because it analyzes how humans act to maximize their outcomes and benefit themselves.

Political economics emphasizes quantitative methods such as formal modeling, econometrics and comparative case studies. It focuses on how international and domestic political variables interact with micro and macro economic variables to produce outcomes that apply to globalization, international trade and finance, taxes, and the environment and income distribution.



1. What is Political Economy? Definition and Characteristics. Retrieved from

Flat-rate tax on comprehensive income

How would income distribution and resource use change if a flat-rate tax on comprehensive income were substituted for the current progressive income tax in the U.S.?

The Political Business Cycle

Do incumbent politicians use their power and influence to get re-elected? Is this a "valid" use of political power? How does this impact business firms? Please discuss these questions.

Economic Industrial and Technologial Revolutions

Select five innovations associated with the Industrial Revolution and five innovations from the Technological Revolution. For each innovation, identify the effects it had on individuals, societies, businesses, and politics.

reducing poverty

Why is rising per capita income necessary but not sufficient for broadly reducing poverty and improving human welfare? Discuss some of the strategies advanced for the reduction of poverty in developing countries.

price ceiling

Demonstrate the effects of a price ceiling and a price floor on a market. As for what happens with pricing is different than equilibrium, a price Floor is Minimum wage where the wage rate is higher than the rate at equilibrium. While a price Ceiling is like rent controls in large cities to keep rents lower so it is more affordab

Emphasize international investment.

Economic and political stability are important factors to be considered when finalizing an international investment. What are some specific risks of investing in politically and economically unstable countries? Cite real life examples.

Company selected is Hewlett Packard

Select a U. S. company with global operations. 1. Discuss the firm's activities outside the U.S. 2. Identify which economic concepts, such as comparative advantage, apply to your firm. 3. Explain how these economic concepts can be used to address the firmâ??s problems and opportunities? 4. Identify which economic and polit


Economic indicators are economic statistics that tell us how well the economy is doing. The GDP, unemployment rate, and inflation rate are the most common macroeconomic indicators. The change in the GDP tells us whether the economy is in an expansion or recession. GDP is the total value of all final goods and services produced i

Economic policy

1. A lawyer who drives a beat-up car and wears frumpy clothes may have a hard time getting clients. Potential clients may conclude from his appearance that he is poor, and if he is poor, he probably is not very good. If the above is true for a lawyer dressing in expensive and stylish clothing is a way of: a) internalizing ex

5 Questions

1. When economists with different political views do cost/benefit comparisons, they often reach different conclusions. If their analysis is based on objective costs and valid techniques, why wouldn't they reach similar conclusions, even if those conclusions conflicted with their political beliefs? Explain. 2. Why do we

voting mechanisms ranked

One popular voting scheme is rank-order voting, where individuals assign a rank (1,2,3) to the possible alternatives; the assigned ranks are then added up and the alternative with the lowest sum wins. Consider a choice among the 4 alternatives (a library, a ski slope, a swimming pool and a garbage dump)


As an international economist you have been asked to prepare a short speech which answers the following questions: 1. How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns? 2. The Heckscher-Ohlin theory demonstrates how trade affects the distribution of income withi

Economics for Decision-Making: Current State of the U.S. Economy

Deliverable Length: 9-12 slides with notes Create a presentation for the Board which examines the current state of the U.S. economy. Use the Library to find the up-to-date information needed. Focus on four key economic metrics: Gross Domestic Product (GDP), unemployment, inflation, and interest rates. In addition, discuss th

Why is democracy associated with capitalism?

1. Why is democracy associated with capitalism? Consider the impact of the capitalistic free market on the following: -The mobility of Capital and Labor -The affect of less government regulation which is characteristic of capitalism -The impact of the free market on the level of government ownership of firms. -The affect

Globalization controversy

Discuss the economic and political economy aspects of the globalization debate. Why has globalization created so much controversy?

Economics in a Global Environment

3-4 Pages Details: As an employee of the World Bank you have been asked to research the needs of a country with a particular economic concern. select a country and an economic concern, such as population, unemployment, etc. Search the Library and Internet for data sets for the concern that you have chosen. In a 3-4 page

Dasani bottle water's global business

Select a company with operations. I have selected Dasani bottled water. 1. Discuss the firms's activities outsize the U.S. 2 Identify which economic concepts, sure as comparative advantage, apply to your firm. 3. Explain how these economic concepts can be used to address the firms's problem and opportunities? 4. Identify

Writing in Economics

1. What is plagiarism? 2. What is "reverse plagiarism" and why might Milton Friedman have indulged in it in 1956? HINT: search for articles on the Chicago oral tradition (I have 2 books on the subject: R. Leeson ed. _Keynes, Chicago and Friedman_. Chatto and Pickering). 3a. Which sources are academically respectable?

Economic recession & political action

Assume that the economy is already in a recession, and both the President and Congress have decided to do something to restore the economy. Both agree that lowering taxes would not be a good idea, but do believe that it is in the best interest of the economy to increase government spending in defense, education & infrastructure.

If you were given the responsibilities of an economic adviser Nikita Khrushchev of the Soviet Union. How would you, as a central planner, decide what, how, and for whom to produce goods and services in a country of roughly 123 million people at the time? How successful your plan would be?

I need some help to the questions below. Thank you. If you were given the responsibilities of an economic adviser Nikita Khrushchev of the Soviet Union. How would you, as a central planner, decide what, how, and for whom to produce goods and services in a country of roughly 123 million people at the time? How successful your

Economics, Multiple Choice

A What is the best answer? 1. According to Colander, the best definition of economics is: a. the study of how limited resources are allocated among competing needs. b. the study of scarcity and how people deal with the problem of scarcity. c. the study of how choices are made. d. the study of how human beings co

Economic Reasons for Gasoline Price Fluctuation

I wanted some additional information on what I have already ... is there more reasoning to why the prices are rising? Could the hurricane Katrina have resulted in this? How can the economic reasoning be explained more. .. I have the added information that was provided but I need additional economic reasoning. (See attache