“Normative” and “positive” economics are old terms, that get abused constantly, used out of context (largely by me), and make philosophers dislike economists. This is cool and all – but I think the is-ought distinction still provides a useful perspective on considering policy. So I thought I’d quickly flesh that out.
A positive economic analysis is about comparing outcomes – describing what occurs and why, given shared definitions of what the key elements are, but not of how they are valued. A normative economic analysis is about choosing from a set of outcomes – it requires valuing these elements of our analysis. Read more