International Political Economy
Economy
Economy: Economics is a study of human behavior in financial aspects of life.
Humans are considered as decision makers (Consumer, Producer, and Policy Makers). Decisions are subjective but they depend on the taste or satisfaction of the decision makers.
1) Consumers Decision: What can a consumer buy with the limited resources he has?
2) Producers Decision: How can a producer get more and more profit by using LAND, LABOUR, and CAPITAL?
3) Policy Makers Decision: Policy Makers have a problem of minimal resources. And by using these minimal resources they have to address very many needs of society.
Economics is based on some assumptions:
1) Resources are limited.
2) Multiple choices or alternatives are there in the market.
3) All the choices are equally attractive.
4) Optimization is every body’s choice. i.e. MAXIMUM utility, profit, output, satisfaction etc and MINIMUM loss, cost, dissatisfaction, etc.
Political economy
Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. It developed in the 18th century as the study of the economies of states (also known as polities, hence the word "political" in "political economy"). In contradistinction to the theory of the Physiocrats, in which land was seen as the source of all wealth, some political economists proposed the labour theory of value (first introduced by John Locke, developed by Adam Smith and later Karl Marx), according t ...