Positive economics

Positive economics (as opposed to normative economics) is the part of economics that deals with positive statements. Positive economics, was originated from positivism and got introduced to economics by John Stuart Mill in his book Auguste Comte and Positivism^[1] in 1860's, reflecting upon Comte's positivism. Then, it was developed by John Neville Keynes^[2] in the 1890's and it became popular economical thought by elaborations of Lionel Robbins^[3] in the 1930s. In essence, positive economics studies what is rather than what ought to be. While economics can be filled with subjective statements such as value and allocation, it is vital to distinguish that what be is not objectively permanent or desirable.

Positive economics focuses on the description, quantification and explanation of economic phenomena.^[4] It deals with empirical facts as well as cause-and-effect behavioral relationships and emphasizes that economic theories^[5] must be consistent with existing observations and produce testable, precise predictions about the phenomena under question.^[6] Positive economics as a science concerns analysis of economic behavior^[3] to determine what is true. Examples of positive economic statements are "the unemployment rate in France is higher than that in the United States," or “an increase in government spending would lower the unemployment rate.” Either of these is potentially falsifiable and may be contradicted by evidence. Positive economics as such avoids economic value judgments. For example, a positive economic theory might describe how money supply growth affects inflation, but it does not provide any instruction on what policy ought to be followed. Positive economics is based on facts which can or cannot be approved. It provides an "objective" system of generalisations. However, due to economics being directly related with human beings, achieving objectivity can be hard. On the other hand, normative economics is based on judgments which they are either good or bad. For example, “Government spending should be increased” is a normative statement.