Giving a definition
Macroeconomist Christian Takushi has developed the concept of Geopolitical Economics, and defined it as follows:
Geopolitical Economics is primarily macroeconomic analysis & reasoning that takes into account geopolitical forces and factors. How geography and control over all types of resources are not only shaping the political process and foreign policy, but increasingly the economy and financial markets. Nevertheless not in exclusive mono-causality, but with causality in both directions. Geopolitical interests are increasingly driving economic and monetary policy, but economic interests are also shaping military, foreign & energy policy. This reflects the complexity of a fast-evolving globalised economy with its feedback-loops.
Because “Geopolitics” encompasses all factors related to the geography & resources of nation states (from river-grids, impassable mountains, minerals, gas, oil . . to . . labor force, population, their religion and political system), and those factors are undergoing dramatic changes, Macroeconomic Analysis can no longer focus solely on monetary and financial phenomena as it did during the Cold-War era. It will otherwise continue to produce unacceptably inaccurate Economic Outlooks. The post-modern Global Economy is becoming increasingly geopolitically-influenced, thus we live in the era of Geopolitical Economics.
(above definition sprang from over 20 years of exposure to academic theory, empirical research and practice as an economist & investment manager. It is the result of real-life work, decision making and the fact that most political and geopolitical research is ideological, not independent and not practically relevant for business owners and investors. How will a geopolitical risk impact the economy, trade and currencies? Which sectors will benefit or suffer? Investors cannot afford to worry about every crisis somewhere in the world. Having said that, businesses and investors need to embrace the new realities of a world in which geopolitical and political factors are influencing policy decisions, the economy and financial markets.)
The rise of Geopolitical Economic Research is in part a response to the fact that over the past two decades world equity, bond & derivatives markets were dramatically affected by so-called external shocks and forces. Some of the biggest moves in financial markets were not driven by financial variables, rather policy makers, geopolitics, etc. Example: The recovery of equity prices from 2009 to 2015 was mainly achieved by a massive intervention of US policy makers. They drove the prices of Government Bonds higher in order to lower Bond Yields in financial markets, single-handedly shifting inflation & risk expectations out of a “Liquidity Trap”. The rise of China and other powers as key trade partners, biggest US creditors, but also contenders for global supremacy played a role in the magnitude and timing of policy-making.
Wikipedia offers one of the best definitions for both Macroeconomics and Geopolitics: (here only excerpts)