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Difference Between Positive Economics vs Normative Economics

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There are no facts present behind each statement, and it deals with the thought process of what should be the situation. Hence, This part of Economics deals with values, judgments, and opinions. Thus all the statements related to this are priorities on what is to be done according to morality rather than the situational requirements. It is this part of economics that is subjective.

For Example

In a Normative Economy, we all know that – All the citizens of India should get Free Education and Medical Services from the Government. Thus this is the general theory of the country. Therefore the Government should act on this line of work, and thighs should happen as per this theory only. But the Positive theory would argue that everyone in the population has access to medical care or not. The real data will be contradictory if compared with the normative belief. Thus the normative part is fictional and not backed up by real data. Again if we go by the real data analysis, we would find that the major population is not getting a free education.

In comparison, most educated people have not taken the Government’s free education. The cost of education for a literate person was very high. Thus it falls under the category of a Positive economy, and based on these facts, there might be various opinions from different groups.

Positive Economics vs Normative Economics (Infographics)

Key Differences Between Positive Economics vs Normative Economics

Both Positive Economics vs Normative Economics are popular choices in the market. The primary difference :

One of the primary differences between positive economics and normative economics is a matter of truth. Positive economics deals with the relevant data, facts, and figures required to analyze the respective arguments. On the other hand, Normative Economics deals with fiction and what was needed to do and does not include any data interpretations or checking of data.

The current demand-supply situation, the preferences of the masses, the change in the entire course of action by the government, and the actual results of the actions taken were captured under positive economics. On the other hand, the moral values of a particular scenario and the fictional thought process projected to carry on include the Normative Economy.

Data, information, and facts always back up Positive Economics, whereas normative economics does not require these as it only captures the values.

Positive Economics vs Normative Economics Comparison Table

The Basis of Comparison

Positive Economics

Normative Economics

Related to A positive economy relates to the causes and effects of an economy. It captures the consumer or the mass sentiment and the consequences. Normative economics generally believes in the theory that prevails as per morality or the things that need to do.

Meaning It strongly deals with facts and data. Thus the facts lead to various opinions and different judgments. The Normative Economy also deals with the fictional part of the thought process. It deals with what is essential rather than what can be done from the current scenario.

Nature The nature of the positive economy is based on data and facts. It is highly narrative regarding the demand and supply situation and current trends. The Normative economy deals with perceptions and the morally relevant things that must happen in a certain situation.

Argument The argument that could arise is objective as data and relevant information well back it up. The argument would be subjective because there is no real data. All the facts are morally fitted as per the situation.

Testing The statements/ argument under positive economy can be tested with the estimated figures, and from there, the right or wrong or the difference can be found. The statement is impossible to test as the data are not available because those are also based on a different philosophy, moral values, etc. No one could compare morality with facts and figures.

Caused by Need The facts are required for a reality check on the economy. Sometimes the desired results may move in a different direction; hence, we need to take the help of a Positive economy to control this. The opinions must provide a moral value to the system and the steps needed for better economic results.

Based on Real data, facts, drivers of demand and supply, the difference in expectations, practical implementations, etc. It is based on moral values, theories of what needs to be done, and also fictional concepts.


Therefore, the concepts of Positive Economics vs Normative Economics are necessary and important based on the situation. The policymakers emphasize Positive Economics vs. Normative Economics concepts, and their principles are used on a situational basis. The overall framework is required, which can be called the value or the moral of the particular segment. Then the results must be extracted and tallied with the budgeted figures. Thus, the difference can be obtained and worked upon to get the desired results morally supported by Normative Economics.

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