Economics Welfare Economics Questions Medium
Positive economics and normative economics are two branches of economics that differ in their approach and focus. In the context of welfare economics, these two branches provide different perspectives on analyzing and evaluating economic policies and their impact on societal welfare.
Positive economics is concerned with describing and explaining economic phenomena as they are, without making value judgments or prescribing what should be. It aims to provide objective analysis based on empirical evidence and data. Positive economics focuses on understanding the cause-and-effect relationships between economic variables and predicting their outcomes. In the context of welfare economics, positive economics would analyze the impact of a specific policy on various economic indicators, such as GDP growth, employment rates, or income distribution. It aims to provide an understanding of how different policies affect economic outcomes without taking a stance on whether these outcomes are desirable or not.
On the other hand, normative economics deals with value judgments and subjective opinions about what should be done to improve societal welfare. It involves making recommendations or prescribing policies based on ethical, moral, or political considerations. Normative economics is concerned with evaluating economic policies in terms of their desirability and their ability to achieve certain societal goals. In the context of welfare economics, normative economics would assess the fairness, equity, and efficiency of different policies and make judgments about their desirability. For example, normative economics might argue that a policy that redistributes income from the rich to the poor is desirable because it promotes social justice and reduces inequality.
In summary, positive economics focuses on objective analysis and understanding the cause-and-effect relationships between economic variables, while normative economics involves subjective judgments and recommendations based on ethical or political considerations. In the context of welfare economics, positive economics provides an understanding of the impact of policies on economic outcomes, while normative economics evaluates the desirability of these outcomes based on societal goals and values.