How Do You Spell NORMATIVE ECONOMICS?

Pronunciation: [nˈɔːmətˌɪv ˌiːkənˈɒmɪks] (IPA)

Normative economics (/ˈnɔːmətɪv iːkəˈnɒmɪks/) is a branch of economics that deals with value judgments and opinions about the economy's fairness and what should be done to promote social welfare. The word "normative" comes from the Latin word norma, which means a rule or standard. The pronunciation of the word has four syllables and begins with the stressed "nor" sound, followed by the unstressed "ma" syllable, then the stress falls again on the "tive," and the final "s" is pronounced.

Meaning and Definition
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NORMATIVE ECONOMICS Meaning and Definition

  1. Normative economics refers to a branch of economics that offers judgments and recommendations on what ought to be, rather than focusing on what is. It is concerned with determining the most efficient or optimal course of action from an ethical or social perspective. Normative economics seeks to analyze and propose policies or actions that guide decision-making processes with the objective of improving economic welfare or achieving a desired outcome based on certain values, goals, or criteria.

    The distinguishing feature of normative economics is its evaluative nature. It involves making value judgments about economic issues by incorporating ethical, political, and social considerations. Normative economists often rely on subjective opinions, preferences, and various value systems to form their conclusions. Since normative economics deals with normative statements or propositions, it is inherently subjective and open to interpretation. These statements express opinions on how the economy should allocate resources, resolve distributional issues, or achieve specific social objectives.

    Normative economics is contrasted with positive economics, which focuses on describing and explaining economic phenomena as they are and avoiding normative judgments. Positive economics investigates the cause-and-effect relationships in economics by using empirical evidence and data analysis. In contrast, normative economics aims to influence decisions and policies by offering judgments, recommendations, and prescriptions for how things could or should be done. It plays a crucial role in shaping economic policies, guiding public debates, and contributing to the overall well-being of societies.

Etymology of NORMATIVE ECONOMICS

The term "normative economics" is a combination of two words: "normative" and "economics".

The word "normative" originates from the Latin term "norma", which means "norm" or "rule". In general, "normative" refers to judgments or evaluations that are based on subjective opinions or beliefs about what ought to be or what is considered morally or socially desirable.

The word "economics" comes from the Ancient Greek word "oikonomia", meaning "household management". It encompasses the study of how societies allocate scarce resources to meet unlimited wants and needs.

Thus, "normative economics" refers to the branch of economics that deals with value judgments, beliefs, or opinions about how the economy should be or what policies and outcomes are desirable from a social or moral standpoint.