Which economics do you speak?
orthodox vs heterodox
الاقتصاد البدعي vs الاقتصاد الأرثوذكسي
consider following statements:
- fiat currency is a hoax
- the law of supply and demand is affected by complex social factors. e.g. the recent increase in gas prices is partly due to speculations, and not just supply and demand.
- The price of a commodity is determined by supply and demand so governments shouldn't intervene. (Price is the equilibrium point where the quantity of a good supplied by producers equals the quantity demanded by consumers.)
The last statement is represents orthodox الأرثوذكسيeconomics whereas the first two are heterodox البدعي. Heterodox economists are the dissenters among economists who think out of the box and dare to venture off the beaten track.
Positive vs. Normative :
consider following statements:
- “Government-provided healthcare increases public expenditures.”
- “The government should provide basic healthcare to all citizens.”
- The regulation of oil prices by the government helps to keep inflation in check.
- The independence of the central bank from the government should be curtailed.
- The development of Special Economic Zones is not working out.
- Progressive taxation is better than regressive taxation.
- Companies should be made to pay for the pollution they cause.
Only the second statement is verifiable with numbers, the rest not. So except for the second one, all the rest are normative economics statements.
Positive economics الاقتصاد الوضعي and normative economics الاقتصاد القيمي are two standard branches of modern economics. Both required for policy-making.
Positive: descriptive | what is | objective |verifiable
normative: prescriptive | What should be |subjective |not verifiable
refs:
https://economics.buffalostate.edu/news/heterodox-vs-orthodox-growing-schism-economic-thought
