Positive Versus Normative Economics: What Economists are Taught

2009 ◽  
Author(s):  
Matthew Medina ◽  
Catherine S. Elliott
Keyword(s):  
Normative Economics

On the Problems of Normative Economics

2007 ◽  
pp. 59-72
Author(s):  
I. Lavrov
Keyword(s):  
Economic Theory ◽  
Political History ◽  
Normative Economics ◽  
Normative Approach ◽  
Normative Analysis ◽  
Positive Elements ◽  
Real Objects ◽  
Methodological Aspects

The author considers theoretical, philosophical and methodological aspects of normative approach in economic theory. The article discusses normative analysis and types of normative and positive elements in economic theory, basing upon difference between abstract and real objects of science. The specific traits of generations as subjects of economic and socio-political history are determined.

The Inner Rational Agent

2018 ◽  
Author(s):  
Robert Sugden
Keyword(s):  
Human Agency ◽  
Welfare Economics ◽  
Rational Agent ◽  
Empirical Content ◽  
Normative Economics ◽  
Normative Analysis ◽  
True Preference ◽  
Implicit Model ◽  
The World ◽  
Psychological Foundation

Chapter 4 reviews ‘behavioural welfare economics’—the approach to normative analysis that is favoured by most behavioural economists. This approach assumes that people have context-independent ‘true’ or ‘latent’ preferences which, because of psychologically-induced errors, are not always revealed in actual choices. Behavioural welfare economics aims to reconstruct latent preferences by identifying and removing the effects of error on decisions, and to design policies to satisfy those preferences. Its implicit model of human agency is of an ‘inner rational agent’ that interacts with the world through an imperfect psychological ‘shell’. I argue that there is no satisfactory evidence to support this model, and no credible psychological foundation for it. Since the concept of true preference has no empirical content, the idea that such preferences can be reconstructed is a mirage. Normative economics needs to be more radical in giving up rationality assumptions.

Taking unconsidered preferences seriously

2006 ◽  
Vol 59 ◽  
pp. 209-232 ◽  
Author(s):  
Robert Sugden
Keyword(s):  
Economic Analysis ◽  
Public Policies ◽  
Natural Conditions ◽  
Normative Economics ◽  
Actual Behaviour ◽  
Normative Economic

In normative economic analysis, it is conventional to treat each person’s preferences as that person’s own standard of value, and as the standard by which the effects of public policies on that person should be valued. The proposal that preferences should be treated in this way is usually qualified by two apparently natural conditions—that preferences are internally coherent, and that they reflect the considered judgements of the person concerned. However, there is now a great deal of evidence suggesting that, in many economic environments, preferences of the required kind simply do not exist. It seems that the preferences that govern people’s actual behaviour are often incoherent and unstable. This prompts the following question: Is there a defensible form of normative economics which respects each individual’s actual preferences, whatever form they take? I shall try to show that there is.

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