Question

International Political Economics - Question

1. What is the study of IPE and what are the main approaches of IPE. Explain their main focuses and characteristics.

Answer 1

IPE is a study of set of related problems.It includes analysis of political economy of international trade ,international finance,multinational corporations , North-South relations and hegemony.

Different approaches to IPE are:

1)Liberal aaproach:it gives importance to free trade and the voluntary tradecotact between different economies depending on their resources and economic ends .

2)Mercantilist approach:Here the competition is between the states which results in one state superior than other states.      

3)Marxist approach:world economy consists of capitalistic competition and the conflict between them capitalist and working class.The captalists are always in search of profits and in order to achieve this they force other economies to accept domination of the capitalistic economies.

characterstics of IPE

1)Political economy is concerned with how political forces influence the economy and the econopmic outcomes .The interaction run both ways political as well as economical.Thus,it is economic activity that generates resources that are required to sustain political activity like election compaign expenses.

2)Political economy analysis is that it uses economic tools to exa,mine political phenomena .As in economics political economy analysis is the assumption that political agents are both self seeking and rational .