Chapter 1.1: Positive Economics vs Normative Economics

By Suraj Chaudhary

When I was in class 11 and was studying economics for the first time, there were so many things that I just couldn’t understand. The difference between Positive Economics and Normative Economics was one of those things. So I did some research and in this article, I’m going to share them with you.


Classical and modern economists have explained economics as a positive science. A positive science or economics is that which studies things as they happen in reality. It explains what is, what was, and what will be.

A normative science or normative economics is that which studies things as they should be. It is related to the criteria of “what ought to be.” It makes prescriptions about what should be done. It is the duty of economists to make a careful study of different economic problems and suggest ways and means to solve problems.

Economics is studied as a normative science by the economists of the neo-classical era.

Differences between Positive Economics and Normative Economics

The differences between Positive Economics and Normative Economics are mentioned below:

BasisPositive EconomicsNormative Economics
DefinitionPositive Economics is that which studies things as they are in reality, as in ‘what is’, ‘what was’, and ‘what will be’.Normative Economics is that which studies things as they should be, as in ‘what should be’ or ‘what ought to be’.
Supported byIt was supported and led by classical and modern economists.It was supported and led by neo-classical economists.
NatureIt is factual or descriptive in nature, which means there doesn’t exist value judgment.It is based on prescription or suggestion which means there exists value judgment.
Deals WithIt deals with actual or realistic situations so it studies the cause and effect of economic problems or activities.It deals with an idealistic situation so it studies only the rightness or wrongness of any decision undertaken.
VerificationArguments or findings under positive science can be verified with actual data.Arguments or findings under normative economics cannot be verified with actual data.
Economic IssuesIt deals with how an economic problem is solved or will be solved.It deals with how an economic problem should be solved.
ResultsThe results of normative economics or science are situationally true, i.e., truths are relative.Positive economic studies on how different mechanisms function to solve the economic problems
FunctionPositive economic studies how different mechanisms function to solve the economic problemsNormative economic studies whether these mechanisms are desirable or not.


In conclusion, the main aim of economics is not only to diagnose the malady existing in the economy but also to offer valuable advice to curb the problems. It means, besides having ample differences between them, economics is both positive and normative science in the modern world.

If you read this article entirely and want to learn more about the basics of economics, read the articles given below.

Also Read

  1. Chapter 1: Basic Concept of Economics and Allocation of Resources
  2. Accounting Terminologies | Class 11 Accountancy (Notes)
  3. Cash Book | Class 11 Accountancy (Notes & Exercises)

Suraj Chaudhary is a writer, developer, founder, and a constant learner. He shares lessons and resources for living a fuller life every week. On this blog, he shares helpful guides and helpful articles that help his 70,000+ monthly readers find answers, solve problems, and meet their curious needs.

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