Normative Economics

Normative economics involves value-based judgments about how the economy should function. It focuses on opinions, recommendations, and ideals, such as advocating for fair income distribution or higher minimum wages. Unlike positive economics, which describes and analyzes economic facts and relationships objectively, normative economics reflects personal beliefs about what is desirable or justified. It helps shape economic policies rooted in ethical considerations, but since it involves subjective judgments, different people may have different normative views.