The terms normative and positive economics are part of any introductory unit in economics, but usually they are not covered beyond that point. They are important concepts because they speak to the limits of economic decision making before it bleeds into areas of morals and values (which many economist seek to stay clear). I must confess that I seldom bring up the terms after the intro unit (I would further say, these concepts are not a significant part of my intro unit).
I think this needs to change. Doing more with the concepts of positive and normative economics is something I have been trying to work more in to my course. I have come to the conclusion that economics, and economists, would be better served if they were more clear about when they have crossed from positive economic statements based on models and statistics and into the normative world of values. Such a practice would also help clarify things for the public. However, I do not see this happening since making a argument based on normative economics seems weaker than one made on positive economics.
Because of my goal of bringing normative and positive economics into my course, I was happy to see Uwe Reinhardt's post "Is Health Care Special?" on today's Economix blog. The focus of the post is the health care market should function like any other market - basically, is health care like houses. However, this post is the first in a series. Still, it is good potential reading on normative and positive economics which ties it to other aspects of economics (particularly the work of Kenneth Arrow). The post describes how Arrow viewed the market for health care in the terms of perfect competition and Pareto optimality. I hope the second part is just as good, since it could be a good reading for reintroducing the concepts of normative and positive economics into the unit on market failure.
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