Jarold Matias

POSITIVE AND NORMATIVE ECONOMICS 

 
Positive economics Positive Economics is a part of economics that considers the explanation and
elucidation of economic occurrence. It focuses on the certainty and cause-and-effect behavioral
association, and includes the development and testing of the economics thesis.

It is the study of economics based on intentional analysis. Today most economists focus on positive
economic analysis, which follows what is and what has materialized in an economy as the rationality for
any statement about the upcoming days. Positive economics stands in contradiction to normative
economics, which uses value discernment.

 
Normative economics is based on beliefs supported by valued judgment of what should and should not
be done that is better for the economic future of the country and leads to the welfare of society.

Difference between Positive and Normative Economics

Parameters Positive Economics Normative Economics

Meaning A part of economics A part of economics that

based on information is based on values,
and certainty is positive perspectives, and
economics. understanding is
normative economics.

Nature Illustrative Dictatorial

Outlook Objective Subjective

Deals with What actually is? What has to be?

Trial Statement can be tested Statement cannot be

tested
Economic problems Economic concerns and Provides solutions for
issues are clearly economic concerns,
explained based on value.