Chapter Introduction

Given the degree to which this text has already discussed the interplay of politics and economics, you have probably concluded correctly that, to a significant extent, economics is politics and vice versa. This chapter and the next will continue to explicate how economics and politics intertwine. The subject of this chapter is the general nature of international political economy (IPE), including IPE theories, and the situation of the economically developed countries (EDCs) of the North and the less developed countries (LDCs) of the South. Chapter 12 will examine the traditional political path of national economic competition as well as the alternative path of international economic cooperation.

It is important before delving into the subject to familiarize yourself with the distinctions between gross national product (GNP) and gross domestic product (GDP), between either of those adjusted for purchasing power parity (GNP/PPP, GDP/PPP), and between current dollars and real dollars. It is also important that you understand how to read graphs (including 100-as-baseline graphs) and that you gain a sense of the origin and reliability of economic statistics. To do so, go to the Explanatory Notes on the Web site, and review "Economics: Technical Terms and Sources."