Economic methodology
| English | Chinese | Pinyin |
|---|---|---|
| value judgement | 价值判断 | jià zhí pàn duàn |
| positive | 实证的 | shí zhèng de |
| normative | 规范的 | guī fàn de |
| ceteris paribus | 其他条件不变 | qí tā tiáo jiàn bù biàn |
| models | 模型 | mó xíng |
| assumptions | 假设 | jiǎ shè |
Fact or opinion?
- "Raising the minimum wage increases unemployment." "The government should raise the minimum wage." One of these can be tested; the other is a value judgement 价值判断.
- Telling the two apart — positive 实证的 vs normative 规范的 — is the first discipline of economic thinking.
Economic method lab
Classify statements by the role they play in economic reasoning.
Positive vs normative
- A positive statement is about what is — factual, testable, can be right or wrong.
- A normative statement is about what ought to be — a value judgement, involving opinion.
Economic growth shifts the PPC outward; decline shifts it inward
Which is a positive statement?
A positive statement is factual and testable; the others are value judgements (normative).
Classify each statement.
Facts/figures that can be checked are positive; "should/ought/fair" statements are normative.
A normative statement expresses a value judgement about what ought to be.
Normative = opinion/"ought"; positive = testable fact.
Ceteris paribus 其他条件不变
- Economists isolate one cause at a time using ceteris paribus — "all other things being equal".
- It lets you say "a price rise lowers quantity demanded" holding income, tastes, etc. constant.
Why it matters. In the real world many things change at once. Ceteris paribus is the economist's version of a controlled experiment — vary one factor, freeze the rest.
The assumption "all other things being equal" is called ceteris ______.
Ceteris paribus lets economists isolate the effect of one variable.
Models 模型 and assumptions 假设
- Economics builds models — deliberate simplifications — to reveal how variables relate.
- A good model makes clear assumptions and gives testable predictions; it's judged by how well it predicts, not by being "realistic".
An economic model is mainly judged by:
Models simplify deliberately; their value is in useful, testable predictions.
The trap
Watch for hidden "should". Words like fair, too high, should, better signal a normative claim. "Inequality is too high" is normative; "the top 1% own 40% of wealth" is positive.
You've got it
- positive = what is (testable fact); normative = what ought to be (value judgement)
- ceteris paribus = "all else equal" — isolate one cause at a time
- economics uses models with clear assumptions, judged by their predictions