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Positive economics focuses on the description, quantification and explanation of economic phenomena, [1] while normative economics discusses prescriptions for what actions individuals or societies should or should not take. [2] The positive-normative distinction is related to the subjective-objective and fact-value distinctions in philosophy. [3]
The essay argues that economics as science should be free of normative judgments for it to be respected as objective and to inform normative economics (for example whether to raise the minimum wage). Normative judgments frequently involve implicit predictions about the consequences of different policies.
Statements of fact (positive or descriptive statements), which are based upon reason and observation, and examined via the empirical method. Statements of value (normative or prescriptive statements), which encompass ethics and aesthetics, and are studied via axiology.
Many researchers in science, law, and philosophy try to restrict the use of the term "normative" to the evaluative sense and refer to the description of behavior and outcomes as positive, descriptive, predictive, or empirical. [1] [2] Normative has specialized meanings in different academic disciplines such as philosophy, social sciences, and ...
Nonetheless, the possibility of a clear distinction between positive and normative analysis has been questioned by Guido Calabresi who, in his book on "The future of Law and Economics" (2016: 21-22), believes that there is an "actual - and unavoidable - existence of value judgments underlying much economic analysis" [13]
He divided economics into "positive economy" (the study of what is, and the way the economy works), "normative economy" (the study of what should be), and the "art of economics" (applied economics). The art of economics relates the lessons learned in positive economics to the normative goals determined in normative economics.
Normative judgments can be made as well by asking questions like whether the gap of the distribution of wealth and income and social justice. Theoreticians regularly try to evaluate both the positive and normative aspects of the economic system in general and they do so by making assumptions about the rules of the game governing utility-seeking.
Erasmus Center for History in Management and Economics. Archived from the original on 13 July 2004 "Mark Blaug" (PDF). Universiteit van Amsterdam, CV. Archived from the original (PDF) on 8 February 2012