Political economy is the study of both economics and politics. It looks at how governmental policy has an impact on economic outcomes. Since the establishment of advanced and pre-advanced economies, politics has always impacted the economics of states and nations globally. One aspect of governmental policy affecting economics is war.
For example, during the first and second world wars, politics significantly affected the economies of warfaring countries and states across the globe. War not only costs the nations involved but has a collateral impact on the wider global economy. On the other hand, conflict can cause an economy to boom due to increased aggregate employment.
Furthermore, sometimes states invade one another or go to war for economic gains, creating a trade-off between politics and economics. When a nation invades another, it can have huge economic impacts for those involved and the wider international community.
Over the last few weeks, there have been rumors that Russia may invade Ukraine again; such an invasion may negatively impact the stock market, increasing volatility and causing economic shocks.