Political economy is the study of production and trade and their relation with law, custom and government; and with the distribution of national income and wealth. The term “economics” usually refers to the study of the economy without factoring political and social considerations, while the term “political economy” represents an approach which is more practical on account of its ‘people centered’ approach.
In common parlance, “political economy” may refer to the advice given by economists to the government, which is not strictly based on maximising utility of Individuals, but also considering political factors that need to be addressed. Naturally, such policy choices would not be an economist’s first choice, but are more likely to find acceptance in governments in modern democracies.
In common parlance, “political economy” may refer to the advice given by economists to the government, which is not strictly based on maximising utility of Individuals, but also considering political factors that need to be addressed. Naturally, such policy choices would not be an economist’s first choice, but are more likely to find acceptance in governments in modern democracies.
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