Positive And Normative Economics

What is Positive Economics?

Positive economics is a part of economics that contemplates the explanation and elucidation of economic occurrence. It concentrates on certainty and cause-and-effect behavioral association and incorporates the development and trial of economics thesis.

It is the study of economics grounded on intentional analysis. Most economists today concentrate on the positive economic analysis, which follows what is and what has been materializing in an economy as the rationality for any statement about the upcoming days. Positive economics stands in contradiction to normative economics, which uses value discernments.

What is Normative Economics?

Normative economics is an outlook on economics that contemplates normative or ideologically dictatorial, discernments toward economic enhancement, statements, investment projects and framework. Disparate to positive economics, which depends on intentional data analysis, normative economics decisively solicitudes itself with value discernments and statements of “what has to be” rather than certitude based on cause-and-effect declarations. Normative economics manifests ideological judgments about what may be the outcome in an economic pursuit if public policy changes are made.

Difference between Positive And Normative Economics

Basis for Differentiation

Positive Economics

Normative Economics


A part of economics grounded on the information and certainty is positive economics.

A part of economics grounded on values, perspectives and discernment is normative economics.







Deals with?

What actually is?

What has to be?

Testing (Trial)

Statements can be tested

Statements cannot be tested

Economic problems

Evidently elucidates the economic concerns and issues.

Provides a solution for the economic concerns, based on the value

After learning the above concepts, we can come to a conclusion that these 2 branches are not antithetical but complementary to each other and they are bound go hand in hand. To know more about Commerce concepts, stay tuned to BYJU’S.