Normative Economics

A perspective on economics that incorporates subjectivity within its analyses. It is the study or presentation of "what ought to be" rather than what actually is. Normative economics deals heavily in value judgments and theoretical scenarios. It is the opposite of positive economics.

Normative statements are often heard in the media because they tend to represent a theory or opinion rather than objective analysis. Normative economics is a valuable way to establish goals and generate new ideas, but it should not be used as a basis for policy decisions.

An example of a normative economic statement would be, "We should cut taxes in half to increase disposable income levels". By contrast, a positive (or objective) economic observation would be, "Big tax cuts would help many people, but government budget constraints make that option infeasible."


Investment dictionary. . 2012.

Look at other dictionaries:

  • Normative economics — is that part of economics that expresses value judgments (normative judgments) about economic fairness or what the economy ought to be like or what goals of public policy ought to be.[1] It is common to distinguish normative economics ( what… …   Wikipedia

  • normative economics — noun economic thought in which one applies moral beliefs, or judgment, claiming that an outcome is good or bad . For example this tax on cigarettes will be good because it will reduce smoking. Contrast with positive economics …   Wiktionary

  • Normative (disambiguation) — Normative in academic disciplines means relating to an ideal standard or model, and in particular a normative statement (or norm see below) is a statement that affirms how things should or ought to be, that is how to value them. Normative… …   Wikipedia

  • economics — /ek euh nom iks, ee keuh /, n. 1. (used with a sing. v.) the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind. 2. (used with a pl. v.) financial considerations;… …   Universalium

  • Normative — For other uses, see Normative (disambiguation). Normative has specialized contextual meanings in several academic disciplines. Generically, it means relating to an ideal standard or model.[1] In practice, it has strong connotations of relating to …   Wikipedia

  • Economics — This article is about the social science. For other uses, see Economics (disambiguation). For a topical guide to this subject, see Outline of economics. Economics …   Wikipedia

  • Normative statement — In economics, a normative statement expresses a value judgement about whether a situation is subjectively desirable or undesirable. The world would be a better place if the moon were made of green cheese is a normative statement because it… …   Wikipedia

  • Normative science — A normative science is a form of inquiry, typically involving a community of inquiry and its accumulated body of provisional knowledge, that seeks to discover good ways of achieving recognized aims, ends, goals, objectives, or purposes. The three …   Wikipedia

  • normative Betriebswirtschaftslehre — 1. Sammelbezeichnung für eine in sich wenig homogene Wissenschaftsauffassung innerhalb der ⇡ Betriebswirtschaftslehre (BWL). Ihre Vertreter halten entweder die Einbeziehung von ⇡ Werturteilen in betriebswirtschaftliche Aussagensysteme (ethischer… …   Lexikon der Economics

  • Economics of global warming — This article describes the economics of global warming and climate change. Contents 1 Definitions 2 Climate change science 3 Scenarios 4 Trends and projections …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.