Positive vs Normative Economics
Normative economics mainly deals with value judgments of the economy. This economics mainly looks at what an excellent economy should be and what has to be recommended to get there. Positive economics mainly focuses on statistics, factual information, and indulges on the scientific formula for determining what an economy should look like.
Positive economics, which is also known as descriptive economics, is subject to scientific analysis. It also deals with the association between cause and effect. Positive economics is based on facts or what is really going on in the economic field.
Normative economics, which is also known as policy economics, makes use of judgments and opinions. In normative economics, an economy is considered ideal after discussing the ideas and judgments. People express their opinion and make judgments without looking at the facts in normative economics. They also distinguish between good and bad policies by making use of the judgments. They also determine the right and the wrong courses of action through judgments.
When positive economics gives out factual statements, the normative economics gives out judgments. In positive economics, the facts are merely stated. In normative economics, the situation is analyzed and proclaims if it is desirable or undesirable.
Normative economics mainly talks about how a country’s economy should look like. It judges the present economic policies and delivers suggestions based on this analysis. This is really informative for the policy makers as they can have an idea about the wrong policies and know how to tackle them. Once they have the facts, the policy makers can change the course of the economy which will be of great significance.
Summary:
1.Normative economics mainly deals with value judgments of economy. Positive economics mainly focuses on statistics, factual information, and indulges on the scientific formula for determining what an economy should look like.
2.Positive economics deals with the relationship between cause and effect. Positive economics is based on facts or what is really going on in the economic field.
3.In normative economics, an economy is considered ideal after discussing the ideas and judgments.
4.When positive economics gives out factual statements, the normative economics gives out judgments. In positive economics, the facts are merely stated. In normative economics, the situation is analyzed and proclaims if it is desirable or undesirable.
5.Normative economics mainly talks about how a country’s economy should look like.
6.Normative economics is really informative for the policy makers as they can have an idea about the wrong policies and know how to tackle them. Once they have the facts, the policy makers can change the course of the economy.