10 Examples of Political Economy
Political Economy- Economic politics is the process of political economy in a country that produces material values for society. Then, examples of cases in this political economy include determining the highest and lowest retail prices for a product. In liberalism, ideology in liberalism will always strengthen market power over people’s abilities.
Political economy, also known as economic policy, is a series of ways that are taken in the form of social actions taken and carried out by the government in the economic field in an effort to achieve the prosperity of its people.
Doing this practice in political economy can implement the social realities that exist in society in providing resilience and also its existence.
Example of Political Economy
Some examples that enter into political economy, among others;
1. Monetary policy
Determining the amount of money in circulation is not entirely from the government, but the government remains the most responsible actor, either directly or indirectly. How much money in circulation must be in accordance with the amount of money needed by the community and the level of circulation or transactions of goods and services?
2. Minimum Pricing (Floor Price)
A minimum price determination is one that aims to ensure that the producer’s selling price is always greater than the cost of production. When the market price of a product is lower than the minimum price set by the government, the policy begins.
3. Maximum Ceiling Price Policy
Maximum Price Determination is a policy of the government with the aim of protecting consumers.
The stipulation of this policy seeks to ensure that the selling price of producers does not exceed the purchasing power of consumers so that people are still able to buy goods and services to meet their needs. However, like floor prices, ceiling prices also encourage the occurrence of a black market.
4. Regional Minimum Wage Setting Policy
The Regional Minimum Wage (MRW) is the wage that applies to one province or district/city. The UMR can be divided into two, namely: Level I UMR or minimum wage applicable in one province and Level II UMR regencies/municipalities.
5. Export-Import Policy
In simple terms, export is an act of releasing products from within the country to abroad in accordance with applicable standards and regulations.
6. Balance of Payments Policy
The balance of payments is a record containing a summary of transactions that occur between residents of one country and residents of other countries during a certain period of time. So, the components in the balance of payments include:
- Current account balance
- Capital balance
- Financial balance
- Net calculation difference
- monetary traffic
7. Foreign Debt Policy
Foreign debt is state debt originating from creditors from outside the country. Then, recipients of foreign debt can be governments, companies, or individuals. Then, the source can also be in the form of money obtained from private banks, governments, or international financial institutions. It can have a positive impact on economic development and increase public savings.
8. International Economic Cooperation Policy
In a broad sense, international economic policy is an economic policy by the government that directly or indirectly affects all forms of international trade and payments in terms of composition, direction, and others. Then, these policies include domestic government policies that indirectly affect the wheels of trade and international payments. For example fiscal policy and monetary policy.
9. Foreign Exchange-Rate Policy
Can interpret the exchange rate as the price or value of a country’s currency as measured by a foreign currency when shopping or buying goods abroad. While the term foreign exchange refers to the currency of another country.
So the foreign currency exchange rate policy is a policy related to the comparison of the value or price between the foreign currency declared or exchanged with the domestic currency value.
10. Employment Policy
Employment is everything related to various types of work before, during, and after the completion of the employment relationship. The Government of Indonesia’s policies related to employment is regulated in Law No. 13 of 2013 concerning Manpower. Section 5 of the law states that every worker has the same opportunity to get a job without discrimination.