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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.
Much of economics is positive, seeking to describe and predict economic phenomena. Normative economics seeks to identify what economies ought to be like. Welfare economics is a normative branch of economics that uses microeconomic techniques to simultaneously determine the allocative efficiency within an economy and the income distribution ...
"Positive economics" became the term created to describe certain trends and "laws" of economics that could be objectively observed and described in a value-free way, separate from "normative economic" evaluations and judgments. Paul Samuelson (1915–2009) wrote the best selling economics texts.
Economic ethics is the combination of economics and ethics, incorporating both disciplines to predict, analyze, and model economic phenomena. It can be summarised as the theoretical ethical prerequisites and foundations of economic systems.
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]
The methodology of economics, or, How economists explain. Cambridge England New York: Cambridge University Press. ISBN ...