General equilibrium theory can be viewed as a specialized branch of game theory that deals with trade and production,and typically with a relatively large number of individual consumers and producers.It is widely used in the macroeconomic analysis of broad based economic policies such as monetary or tax policy,in finance to analyze stock markets,to study interest and exchange rates and other prices.In recent years,political economy has emerged as a combination of general equilibrium theory and game theory in which the private sector of the economy is modeled by general equilibrium theory,while voting behavior and the incentive of governments is analyzed using game theory.Issues studied include tax policy,trade policy,and the role of international trade agreements such as the European Union.
