Dear Learner,

In economics, the two primary methods of logical reasoning are the deductive method, which proceeds from general principles to specific facts, and the inductive method, which reasons from particular observations to develop broader theories. Economists also distinguish between positive economics, which describes and explains economic phenomena without making value judgments, and normative economics, which involves prescriptive statements about what “ought” to be. Positive economics focuses on understanding and predicting “what is” based on empirical evidence, while normative economics makes judgments about desirable economic policies and outcomes. These complementary approaches – deductive and inductive, positive and normative – work together iteratively to build comprehensive economic theories and inform effective policymaking.