The Necessity of Positive and Normative Economics :: essays papers

The Necessity of unequivocal and normative Economics Keynes once wrote The object of a compulsive science is the governing of uniformities, of a normative science the determination of ideals. (Blaug, 122) This is the dichotomy that economists recognize when climax their field of study. The friendly scientist must recognize both positive and normative distinctions, means and ends, as important occurrenceors of fruitful research. Secondly, they must clearly distil the conditions and assumption which theories holds in order for economics to be useful for society. Positive science is that which is a fact of nature or a fact by translation. In mathematics this is the difference between the knowledge that the angles of a triangle sum to 180 degrees, and the definition of a triangle as a two dimensional polygon with 3 sides. In economics, much(prenominal) facts of knowledge include that money is a store of value, or facts of definition that the UNs Human Development Inde x ranks Canada above Mexico. These are each positive facts. Whether they rely or are associated with values does not undertake their factualness to a normative realm. One cannot refute positive statements by claiming they are arrived at due to values. It is up to normative science to attempt the value of the HDI, a positive fact, and not mistake this action as denying the existence of the HDI. This is probably better stated with a topic from macroeconomics. articulate that some economists agree that inflation produces the social cost of having to adjust prices to modernistic levels. This is a completely positive statement. As long as every term has been clearly limitd, one can understand the relation between inflation (as defined) and cost (as defined). Yes, the definitions have been chosen based on specialized values, but this does not disaffirm the statement as a true reprehension of reality. Suppose we make a true statement which denies that inflation produces this social cost, by defining inflation or the cost differently. The old positive fact of reality that the first statement asserted has not changed. By changing definitions, we have merely created a new positive statement. A statement is a true positive fact, according to Weston, when it is consistent with definitions and axioms that define the system. We are not necessarily saying anything about what is true impertinent of that system.