Is Economics a Positive Science or a Normative Science?

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Positive science implies that science which establishes relationship between cause and ef­fect. In other words, it scientifically analyses a problem and examines the causes of a problem.

For example, if prices have gone up, why have they gone up. In short, problems are examined on the basis of facts. On the other hand, normative science relates to normative aspects of a problem i.e., what ought to be. Under normative science, conclusions and results are not based on facts, rather they are based on different considerations like social, cultural, political, religious and son are basically is subjective in nature, an expression of opinions.

In short, positive science is concerned with ‘how and why’ and normative science with ‘what ought to be’. The distinction between the two can be explained with the help of an example of increase in the rate of interest. Under positive science it would be looked into as to why interest rate has gone up and how can it be reduced whereas under normative science it would be seen as to whether this increase is good or bad. Three statements about positive and normative science each are given below:

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Positive Science:

(i) The main cause of price-rise in India is increase in money supply.

(ii) Production of food grains in India has increased mainly because of increase in irrigation facilities and consumption of chemical fertilisers.

(iii) The rate of population growth has been very high partly because of high birth rate and partly because of decline in death rate.

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Normative Science:

(i) Inflation is better than deflation.

(ii) More production of luxury goods is not good for a poor country like India.

(iii) Inequalities in the distribution of wealth and incomes should be reduced.

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