Introduction to Political Economics : PEPF 101

Lecture One
Dr. Hebatallah Ghoneim

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 Lecture Content

• Organization of the Course

• Introduction to the Course

– Fundamentals of Economics

– What is Political Economics

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 Organization of the Course

• OFFICE HOURS/ROOM:
• Dr. Hebatallah Ghoneim: B3.215

• E-mail:Hebatallah.Ghoneim@guc.edu.eg

• Monday 3rd and Thursday 2nd

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 Organization of the Course

• Assessment Methods

Final Exam 40%

Midterm Exam 30%

Assignments 15%

Quizzes 15%

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 Organization of The course

Course References :
According to course outline,
• Stilwell, F. (2015): Political Economy: The Contest of Economic Ideas, 3rd
edition, Oxford: Oxford University Press

• Landreth, H. and Colander , D. (2001): History of Economic Thought, 4th

edition, South-Western College Pub.

• Gilpin, R. (2001): Global Political Economy, Princeton: Princeton University

Press

• Mankiw, N. G. (2014). Principles of Economics, 7th Edition, Cengage

Learning,

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 Introduction

• Course Aim
This course gives an overview of past, current and new
economic theories and their application in political economics.
This course is not based on formal/mathematical analysis but
more on understanding the different assumptions of the theories
(covered in this course) and their consequences in the real
world. The course also covers the dominant economic systems
and discusses their differences. Finally the course aims to give
an introduction into the problems of globalization.

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 What is the nature of Political Economy

Economics is the study of how society Politics is the activity through which people
manages its scarce resources. make, maintain and improve the general
rules under which they live.

• Who people that regulates?

• A search for conflict resolution

• The exercise of power

• The science of government

• Making of collective decisions

• Allocation of scarce resources

• Institutional Impact
 What is the nature of Political Economy

Circular Flow Diagram

Households
Financial
Market
Factor Market

Product Market
Firms

Government

Source: Musgrave & Musgrave (1989, p16)

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 What is the nature of Political Economy

Three Essential Questions

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What is the nature of Political Economy
 What is the nature of Political Economy

What is Political Economy?

 First, political economy is “political” in that it involves the
use of state power to make decisions about who gets what,
when, how, and why in the distribution of public goods and
social values.

 Second, political economy is about the economy or

economics, which means that it deals with how scarce
resources are allocated to different uses and goods are
distributed among individual actors. As the term suggests,
political economy brings together both political and
economic considerations in allocating resources.
 What is the nature of Political Economy

What is the focus of the study of PE?

• The interaction between the state and the market
• By state we usually refer to the political institutions of the
modern nation-state, a geographic region with a well-defined
territory and population and a coherent and autonomous
system of government capable of making collective decisions
and exercising sovereignty, including a coercive apparatus
and the legitimate use of physical force to administer control
over the population within its territory.

• By market we usually mean the economic institutions of

modern economy, which are dominated by individual self-
interest and conditioned by the “invisible hand” of market
forces through the balance of demand and supply.
 What is the nature of Political Economy

• Course Content

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• Questions

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