Political economy—sometimes referred to as comparative economy—is a branch of political science and economics that studies economic systems (such as markets and national economies) and how they are governed by political systems, including laws, institutions, and governments.

The discipline analyzes phenomena such as labour markets, international trade, growth, the distribution of wealth, and economic inequality, as well as the ways in which these are shaped by political institutions, legal frameworks, and public policy. Emerging in the 18th century, political economy is regarded as the precursor to the modern discipline of economics.

In its modern form, political economy is an interdisciplinary field that integrates insights from political science and contemporary economics to study the interaction between politics and markets.

Political economy originated within 16th century western moral philosophy, with theoretical works exploring the administration of states' wealth – political referring to polity, and economy derived from Greek οἰκονομία "household management". The earliest works of political economy are usually attributed to the British scholars Adam Smith, Thomas Malthus, and David Ricardo, although they were preceded by the work of the French physiocrats, such as François Quesnay, Richard Cantillon and Anne-Robert-Jacques Turgot. Varied thinkers Adam Smith, John Stuart Mill, and Karl Marx saw economics and politics as inseparable.

In the late 19th century, the term economics gradually began to replace the term political economy with the rise of mathematical modeling coinciding with the publication of the influential textbook Principles of Economics by Alfred Marshall in 1890. Earlier, William Stanley Jevons, a proponent of mathematical methods applied to the subject, advocated economics for brevity and with the hope of the term becoming "the recognised name of a science". Citation measurement metrics from Google Ngram Viewer indicate that use of the term economics began to overshadow political economy around roughly 1910, becoming the preferred term for the discipline by 1920. Today, the term economics usually refers to the narrow study of the economy absent other political and social considerations while the term political economy represents a distinct and competing approach.

Originally, political economy meant the study of the conditions under which production or consumption within limited parameters was organized in nation-states. In that way, political economy expanded the emphasis on economics, which comes from the Greek oikos (meaning "home") and nomos (meaning "law" or "order"). Political economy was thus meant to express the laws of production of wealth at the state level, quite like economics concerns putting home to order. The phrase économie politique (translated in English to "political economy") first appeared in France in 1615 with the well-known book by Antoine de Montchrétien, Traité de l'economie politique. Other contemporary scholars attribute the roots of this study to the 13th Century Tunisian Arab Historian and Sociologist, Ibn Khaldun, for his work on making the distinction between "profit" and "sustenance", in modern political economy terms, surplus and that required for the reproduction of classes respectively. He also calls for the creation of a science to explain society and goes on to outline these ideas in his major work, the Muqaddimah. In Al-Muqaddimah Khaldun states, "Civilization and its well-being, as well as business prosperity, depend on productivity and people's efforts in all directions in their own interest and profit" – seen as a modern precursor to Classical Economic thought.

Leading on from this, the French physiocrats were the first major exponents of political economy, although the intellectual responses of Adam Smith, John Stuart Mill, David Ricardo, Henry George and Karl Marx to the physiocrats generally receive much greater attention. The world's first professorship in political economy was established in 1754 at the University of Naples Federico II in southern Italy. The Neapolitan philosopher Antonio Genovesi was the first tenured professor. In 1763, Joseph von Sonnenfels was appointed a Political Economy chair at the University of Vienna, Austria. Thomas Malthus, in 1805, became England's first professor of political economy, at the East India Company College, Haileybury, Hertfordshire. At present, political economy refers to different yet related approaches to studying economic and related behaviours, ranging from the combination of economics with other fields to the use of different, fundamental assumptions challenging earlier economic assumptions.

Political economy most commonly refers to interdisciplinary studies drawing upon economics, sociology and political science in explaining how political institutions, the political environment, and the economic system—capitalist, socialist, communist, or mixed—influence each other. The Journal of Economic Literature classification codes associate political economy with three sub-areas: (1) the role of government and/or class and power relationships in resource allocation for each type of economic system; (2) international political economy, which studies the economic impacts of international relations; and (3) economic models of political or exploitative class processes. Within political science, a general distinction is made between international political economy typically examined by scholars of international relations and comparative political economy, which is primarily studied by scholars of comparative politics.