Political economy is the study of how economic and political (e.g. law, institutions, government) systems are linked.
Political economy studies macroeconomic phenomena such as growth, distribution, inequality, and trade, and how these phenomena are shaped by institutions, laws, and political behaviour.
Originating in the 16th century, it is the precursor to the modern discipline of economics. Political economy in its modern form is considered an interdisciplinary field, drawing on theory from both political science and modern economics.