Positive-Normative distinction

Résumé du document

The methodology in economics is important because it gives us a better understanding of the economic analysis. The purpose of economic theory is to provide a comprehensive framework for the study of human behaviour declares Gary Becker (1976). As the aim of the economy for governments is to improve the social welfare, there are different means to reach this issue . The goal of welfare economics is to maximize "the sum of utilities of individuals whose preferences are normally represented as greedy and selfish". The distinction between positive and normative economics is not a recent question. Positive economic relates rather about sciences. It explains the economic view from the facts, thus it wants to be objective with "declarative statements about the world".

Extraits

[...] Positive-Normative distinction The methodology in economics is important because it gives us a better understanding of the economic analysis. The purpose of economic theory is to provide a comprehensive framework for the study of human behaviour declares Gary Becker (1976)[1]. The distinction between positive and normative economics As the aim of the economy for governments is to improve the social welfare, there are different means to reach this issue[2]. The goal of welfare economics is to maximise sum of utilities of individuals whose preferences are normally represented as greedy and selfish”[3]. [...]

[...] It is impossible for an economist to give all objective information and predictions. The answer is simply and clear, any scientists have value judgment about their works. They have to forecast the results, so it is not completely objective. An economist has to use partially positive and normative economics in order to give or take a decision. “Economists are not scientifically detached in assessing economic theories”, Robert Heilbroner (1973, p.138). Bibliography Blaug, Mark. (1993) The Methodology of Economics: Or How Economists Explain, (Second Edition) Cambridge University Press: Cambridge Dow, Sheila. [...]

[...] This is the maximum collective ophelimity (word used by Pareto instead of utility). In 1930's, the new value-free welfare economics, presented by Hicks and Kaldor, said that it is possible to make a person better off without making anyone else worse off. It is the Potential Pareto Improvement (PPI). According to Archibald (1959), there is no need of value judgment as individuals who make their own choices reach the efficiency of paretian welfare economics. For instance, it is logical that an individual will chose the highest preference that he can get in his welfare map. [...]

[...] A statement can be though as wrong by the majority, it does not mean that it IS wrong. In the normative point of view, the economist gives a value not a fact that can be true or false. The value judgment by Nagel, which links to the normative economic is called appraising value judgment. It introduces evaluative assertions about state. The important point about value judgments is that they can be pure or impure. It is basic the judgment is supposed to apply under all conceivable circumstances, and it is non basic otherwise” (Sen p.59)[7]. [...]

[...] (1999) Reason and Reality in the Methodologies of Economics: An Introduction, Edward Elgar: Cheltenham, p.38 Dow, Sheila. (2002) Economic Methodology: An Inquiry, Oxford University Press, p.65 Ibid. p.67 Blaug, Mark. (1993) The Methodology of Economics: Or How Economists Explain, (Second Edition) Cambridge University Press: Cambridge, p.112 Ibid. p.112 Ibid. p.114 Ibid. p Ibid p.126 Ibid. p.125 Dow, Sheila. [...]