Positive Economics vs. Normative Economics

Difference between Positive Economics and Normative Economics Economics is a subject which is very useful for each of us…

Difference between Positive Economics and Normative Economics

Economics is a subject which is very useful for each of us but most of us fear it because of the difficult terminology and phrases. It is good for us to understand the difference between Positive Economics and Normative Economics

In general a positive statement refers to a factual statement which is meant to be informative while a normative statement includes views and has a kind of judgment telling you if a particular situation should be there or not. A normative statement is a result of analysis of the factual statement.

This clear differentiation between positive and normative economics has been very helpful because a normative statement makes it easier for the common man to understand the implications of a factual statement.  Normative economics made it easier for them to evaluate if a particular economic measure or give facts about the economic conditions are favorable to them or not.

In any given society no economic policy can satisfy the aspirations of all the members of that society. This is why presence of positive and normative economics becomes more important because you not only have the facts but also have the analyzed views on those facts which help in showing if the judgmental views are in favor or are against the economic policies framed by the government.

Normative economics talks about the economic state which should ideally exist and it focuses on making recommendations on how the procedures should be changed or modified to achieve that idealistic state after analyzing the facts. This information is then used by the policy makers in developing the policies so as to be as close as possible to the ideal state.

Normative economics feels that the role of economists should be more than just collection and presentation of the facts although the main job of an economist is to collect and present the data and facts in a completely unbiased manner and make it available to the public.


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