Political economy

The course aims at providing a basic knowledge of the concepts and analytical tools of political economy. The nature of capitalism and the world economy are first addressed, with a historical and systemic perspective, considering the evolution of technologies, capital, labour, and phases of development. The evolving boundaries between market and non-market activities,

The macroeconomic analysis at the national level investigates different dimensions of economic activities, and their interactions, addressing (i) the production system, using capital, labour and technology to supply goods; (ii) the market for goods where demand appears; (iii) the labour market, where labour is hired; (iv) the role of money, shaping prices, interest rates, liquidity for transactions and financial investment; (v) the international dimension of all such processes; (vi) the distributive process, where national income is divided between wages, profits and rents, shaping domestic inequalities.

The role of the State in guiding such activities and in providing public services outside the market is also addressed, considering the dynamics of taxation, public expenditure and government debt. The policies addressing each of the above processes include: structural, industrial and technology policies for shaping the production system and supply; demand-side fiscal policies; monetary policies; labour policies; distributive policies.

A closed-economy perspective is integrated by an international perspective considering (i) the system of international production organised by large multinational corporations, driving the flows of technology and investment; (ii) international trade and the flow of goods and services affecting patterns of demand; (iii) the world monetary and financial system organised by Central Banks and stock markets, shaping prices, currency markets, capital flows, international investment; (iv) the international movements of labour and migrations; (v) the distributive outcomes in a hierarchical world system, shaping world inequalities. In such a context, the role of nation States is reduced and multilateral institutions and forms of international governance have emerged. Complex forms of regulation and changing rules now affect transnational economic processes.

The perspective that is adopted moves beyond the neoclassical view of markets in equilibrium, considers power relations and hierarchies in economic activities, the conflict between capital and labour and the broader contention over economic issues. The limits of political economy and its interactions with other disciplines – politics, sociology, behavioural sciences, ecology – are finally examined.