It's a way to explain, how politican influence economic output.
The new political economy is occupied with conflicts of interest within a heterogen group.
1.2 Politics and Economics
What is the different between political economy and for example public finance?Public finace is more about how the public sector has an affect to the other economic actors through tax and expenditure.
1.3 Types of Heterogeneity
There is a different way in solving the problem of heterogeneity between
the heterogeneity on the market and in political economy. In political
economy there are different types of heterogeneity, ex-ante and ex-post,
e.g. after soliving a problem there is still heterogeneity.
1.4 An Illustration of Approches
By takeing the optimal saving problem, you can see the different between ex ante and ex post heterogeneity, and how a conflict of interests works.
Sascha Frank
Last modified: Wed Nov 16 19:37:20 MET 2005