The term "political economy" refers to the interplay between politics and economics, examining how political institutions influence economic policies and outcomes. It studies how government decisions affect resource allocation, production, and consumption, and how economic conditions can impact political behavior and governance. By analyzing this relationship, political economy seeks to understand the motivations behind policymaking, the role of interest groups and ideologies, and the effects of globalization on national economies. This framework helps elucidate complex interactions between social structures, power dynamics, and economic development.