[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

20 ∂ CHAPTER 1 MODERN ECONOMICS
profits of U.S. textile manufacturers, and the reduced employment among textile
workers in developing countries. Economists might disagree over the consequences
of restricting imports because they disagree over the magnitude of the effects,
perhaps agreeing that prices to consumers would rise but disagreeing over the size
of that rise.
In the end, though, the policy question is, Should there be restraints on textile
imports? This is a normative question. Normative economics would weigh these various
effects—the losses to consumers, the gains to U.S. textile workers, the increased
profits—to reach an overall judgment. Normative economics develops frameworks
within which these complicated judgments can be systematically made. Good normative
economics also tries to be explicit about precisely which values or objectives
it is incorporating. It tries to couch its statements in the form “If these are
your values, then this is the best policy.”
Economists, like members of any other profession, often have different values.
Two economists might agree that a particular tax change would increase saving
but would benefit the wealthy more than the poor. However, they might reach different
conclusions about the desirability of that tax change. One might oppose it
because it increases income inequality; the other might support it because it promotes
saving. They differ in the values they place on the effects of the policy change,
so they reach different conclusions even when they agree on the positive analysis of
the proposed policy.
While economists may often seem to differ greatly among themselves, in fact
they agree more than they disagree. When they do disagree, economists try to be
clear about the source of their disagreement: (1) to what extent does it arise out of
differences in models, (2) to what extent does it arise out of differences in estimates
of quantitative relationships, and (3) to what extent does it arise out of differences
in values? Clarifying the source of and reasons for disagreement can be a very
productive way of learning more about an issue.