Abstract
Economics can be helpful in law-making and law-application in three different manners. The first manner - limited only to law-application - consists in the use of economics for ascertainment of facts relevant for a particular dispute.
The second manner consists in the use of the conceptual or terminological apparatus of economics for making or interpretation of legal rules. The third manner consisting in ascertainment and evaluation of effects of law on human behaviour and, vicariously, on other variables can be utilized in both law-making and law-application.
This third manner of use of economics referred to as the economic analysis of law can be further categorized. Positive analysis consists in forecasting the effect of law on human behaviour.
Normative analysis suggests criteria that may be used to evaluate law-influenced aggregate human behaviour and its consequences. Prescriptive analysis consists in designing law, using the insights of positive analysis, in such a way that law achieves its goals.