Can I Upload my Preprint on Arxiv Before Submitting it to JPE I wrote a paper relating the optimal deterrence strategy for crime to concepts on statistical physics, and I am considering submitting the paper to the Journal of Political Economy. I'm wondering if posting the preprint on Arxiv violates the journal's policy, or lowers the chances of my paper being accepted. 

I'm not too familiar with the standard practices in the field of economics. Where do people commonly publish their preprints, if at all?
Most papers I have read in the JPE circulated in form of preprint before (not on arxiv, but this should not be an important point). See for instance https://ideas.repec.org if you want to find examples of working papers later published in JPE:

But it is probably better to read the journal's policy before submission.