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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]
This rendered all facts about human action examinable under a normative framework defined by cardinal virtues and capital vices. "Fact" in this sense was not value-free, and the fact-value distinction was an alien concept. The decline of Aristotelianism in the 16th century set the framework in which those theories of knowledge could be revised. [6]
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. The essay suggests that such differences ...
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 ...
Normative law and economics goes one step further and makes policy recommendations based on the economic consequences of various policies. The key concept for normative economic analysis is efficiency, in particular, allocative efficiency. A common concept of efficiency used by law and economics scholars is Pareto efficiency. A legal rule is ...
Public choice analysis has roots in positive analysis ("what is") but is sometimes used for normative purposes ("what ought to be") to identify a problem or suggest improvements to constitutional rules (as in constitutional economics).
Positivism is a philosophical school that holds that all genuine knowledge is either true by definition or positive – meaning a posteriori facts derived by reason and logic from sensory experience. [ 1 ] [ 2 ] Other ways of knowing , such as intuition , introspection , or religious faith , are rejected or considered meaningless .
Positive accounting is the branch of academic accounting research that seeks to explain and predict actual accounting practices. This contrasts with normative accounting , that seeks to derive and prescribe "optimal" accounting standards.