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 behavioural association, and incorporates the development and trial of economics thesis.

It is the study of economics grounded on the intentional analysis. Today most economists concentrate on the positive economic analysis, which follows what is and what has been materialising 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.

What is Normative Economics?

Normative economics is an outlook on economics that contemplates normative or ideologically dictatorial, discernment toward economic enhancement, statements, investment projects and framework. Disparate to positive economics, which depends on intentional data analysis, normative economics decisively solicitude itself with value discernment and statements of ‘what has to be’ rather than certitude based on cause-and-effect declarations.

Normative economics manifests ideological judgement about what may be the outcome in an economic pursuit if public policy changes are made.

Difference between Positive and Normative Economics

Parameters Positive Economics Normative Economics
Meaning A part of economics grounded on information and certainty is positive economics. A part of economics grounded on values, perspectives, and discernment is normative economics.
Nature Illustrative Dictatorial
Outlook Objective Subjective
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 the conclusion that these two branches are not antithetical but complementary to each other and they are bound to go hand in hand. To know more about commerce concepts, stay tuned to BYJU’S.

Important Topics in Economics:


  1. This is more important to the students