Economic Growth Case
Positive economics involves objective and facts based statements. However, this doesnt mean positive economics statements have to be correct; they must be tested and proved or disproved. In Milton Friedman book, Essays in Positive Economics (Friedman, 1953), he mentioned that economic policy should depend less on normative economics and rather concentrate more on positive economics and become consensus. On the other hand, one type of economics shouldnt be scraped for another. Both these economic approaches of economic are linked; they both accompaniment each other when forming arguments.
Normative economics is concerned with what “ought” to be, relating issues with theory and projections within theory. For example, this can include neoclassical economics and trickle-down theory. Normative economics could help us analysis and invent new ideas to help us achieve objectives but this very limited when it does not empirical evidence to back it up.
“Without theory is blind, and theory without research is empty” (Bourdieu and Wacquant, 1992).
This statement is suggested to be in favour with positive economics. Positive analysis therefore aims to explain things in reality and make prediction about future policy measures based on empirical evidence. So therefore, this analysis is focused on what “is”.
Both these types of analysis need each other. Normative analysis can help give research and promote imaginative investigation. In the end these ideas needs to be backed up with positive economics; to help give these ideas some weight. Similarly, value judgements define what we concentrate our empirical studies on. Positive analysis gives us insights that can help strengthen or weaken normative economic models.