Positive Economics and Normative Economics

Positive Economics and Normative Economics

Positive economics:

an approach to economics that seeks to understand behavior and the operation of systems without making judgments. It describes what exists and how it works.

Normative economics:
an approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action.  Also called policy economics. When economists disagree, the points they argue about are often normative points (differences of opinion and values).