Normative economics: Difference between revisions

Browse history interactively

← Previous edit Next edit →

Content deleted Content added

VisualWikitext

Inline

Revision as of 00:17, 20 August 2024

Redirect to:

Positive and normative statements

@@ Line 1: / Line 1: @@
+#REDIRECT [[Positive and normative statements]]{{DEFAULTSORT:Normative Economics}}
-{{Short description|Branch of economics}}'''Normative economics''' (as opposed to [[positive economics]]) is the part of [[economics]] that deals with [[Normative statement|normative statements]]. It focuses on the idea of [[Equity (economics)|fairness]] and what the outcome of the economy or goals of [[public policy]] ''ought to be''.<ref name = "Samuelson">[[Paul A. Samuelson]] and [[William Nordhaus|William D. Nordhaus]] (2004). ''[[Economics (textbook)|Economics]]'', 18th ed., pp. 5-6 & [end] Glossary of Terms, "Normative vs. positive economics."</ref>
-Economists commonly prefer to distinguish normative economics ("what ought to be" in economic matters) from [[positive economics]] ("what is"). Many normative (value) judgments, however, are held conditionally, to be given up if facts or knowledge of facts changes, so that a change of values may be purely scientific.<ref>Stanley Wong (1987). "Positive economics", The ''New Palgrave: A Dictionary of Economics'', v. 3, p. 21.</ref> On the other hand, welfare economist [[Amartya Sen]] distinguishes ''basic (normative) judgements'', which do not depend on such knowledge, from ''nonbasic'' judgments, which do. He said, "no judgments are demonstrably basic" while some value judgments may be shown to be nonbasic. {{clarification needed| reason=this is an allusive sentiment, rather than a concrete sentiment, as more appropriate on Wikipedia; the door is ajar to what, precisely? |text=This leaves open the possibility of fruitful scientific discussion of value judgments.|date=September 2023}}<ref>[[Amartya Sen|Amartya K. Sen]] (1970), ''Collective Choice and Social Welfare'', pp. 61, 63-64).</ref>
-Positive and normative economics are often synthesized in the style of [[practical idealism]]. In this discipline, sometimes called the "art of economics", positive economics is utilized as a practical tool for achieving normative objectives, which often involve policy changes or {{clarification needed| reason=unfathomable to me as common knowledge shared among the majority of readers |text=states of affairs.|date=September 2023}}
-An example of a normative economic statement is as follows:
-::''The price of milk should be $6 a gallon to give dairy farmers a higher living standard and to save the family farm.''
-This is a normative statement, because it reflects value judgments. This specific statement makes the judgment that farmers deserve a higher living standard and that family farms ought to be saved.<ref name = "Samuelson"/>
-Normative economics predicates itself upon maximizing both an agents social and political utility, recognized as "aggregating interests".
-Subfields of normative economics include social choice theory, cooperative game theory, and mechanism design.
-Some earlier technical problems posed in [[welfare economics]] and the [[theory of justice]] {{clarification needed |reason="some" is nonspecific; tense is passive (no agent); "leave room for" is woolly; "consideration of proposals" is right out of ''Yes, Minister'' |text=have been sufficiently addressed as to leave room for consideration of proposals|date=September 2023}} in applied fields such as [[resource allocation]], [[public policy]], social indicators, and [[income inequality metrics|inequality and poverty measurement]].<ref>Marc Fleurbaey (2008). "Ethics and economics," ''[[The New Palgrave Dictionary of Economics]]''. [http://www.dictionaryofeconomics.com/article?id=pde2008_E000272&q=normative%20economics&topicid=&result_number=1 Abstract.]</ref>
-== See also ==
-{{div col|colwidth=30em}}
-* [[Distribution (economics)]]
-* [[Economic ideology]]
-* [[Is-ought problem]]
-* [[Justice (economics)]]
-* [[Normative science]]
-* [[Positive economics]]
-* [[Social welfare function]]
-* [[Social choice theory]]
-* [[Welfare economics]]
-* [[Economic progressivism]]
-{{div col end}}
-==Notes==
-{{Reflist|2}}
-==References==
-* [[Andrew Caplin]] and Andrew Schotte, ed. (2008). ''The Foundations of Positive and Normative Economics: A Handbook'',  Oxford. [http://www.oup.com/us/catalog/general/subject/Economics/Theory/?view=usa&ci=9780195328318 Description] and [https://books.google.com/books?id=GoAoZelUInsC&pg=PR9=gbs_atb preview.]
-* Marc Fleurbaey (2004). "Normative Economics and Theories of Distributive Justice", ''The Elgar Companion to Economics and Philosophy'', J.B. Davis and J. Runde, ed., pp. [https://books.google.com/books?hl=en&lr=&id=_ZujWW52n9cC&oi=fnd&pg=PA132&dq=false 132-58.]
-* _____ (2008). "Ethics and economics", ''[[The New Palgrave Dictionary of Economics]]''. [http://www.dictionaryofeconomics.com/article?id=pde2008_E000272&q=normative%20economics&topicid=&result_number=1 Abstract.]
-* Milton Friedman (1953). "[[Essays in Positive Economics#The Methodology of Positive Economics|The Methodology of Positive Economics]]", ''Essays in Positive Economics''
-* [[John C. Harsanyi]] (1987), “Value judgments", ''The [[New Palgrave: A Dictionary of Economics]]'', v. 4, pp.&nbsp;792–93
-* [[Daniel M. Hausman]] and  Michael S. McPherson (1996). ''Economic Analysis and Moral Philosophy'', Cambridge: Cambridge University Press.
-* Phillipe Mongin (2002). "Is There Progress in Normative Economics?" in Stephan Boehm ''et al.'', eds., ''Is There Progress in Economics?'', pp. [https://books.google.com/books?id=KbQc92sYwIMC&pg=PA145 145-170.]
-*[[Amartya Sen|Amartya K. Sen]] (1970), ''Collective Choice and Social Welfare''. "5.3 Basic and Nonbasic Judgments" & "5.4 Facts and Values", pp.&nbsp;59–64.
-* Stanley Wong (1987). “Positive economics", The ''New Palgrave: A Dictionary of Economics'', v. 3, pp.&nbsp;920–21.
-* [https://doi.org/10.4324/9781315457932 Silvestri P. (ed.), L. Einaudi, ''On Abstract and Historical Hypotheses and on Value judgments in Economic Sciences'', Critical edition with an Introduction and Afterword by Paolo Silvestri, Routledge, London - New York, 2017. DOI: https://doi.org/10.4324/9781315457932.]
-{{DEFAULTSORT:Normative Economics}}
 [[Category:Welfare economics]]
 [[Category:Economic methodology]]