What is Positive Economics?

Positive economics, often referred to as descriptive economics, is a branch of the economic discipline that provides an accurate analysis of the world as it exists, devoid of subjective judgments or attempts to influence it. It is primarily concerned with formulating and empirically testing factual statements about the natural world, aiming for verifiability and neutrality.

In stark contrast, positive economics stands apart from normative economics, the latter of which involves value judgments and delves into how things ought to be, should be, or could have been. Positive economics presents an accurate depiction of how the world is, was, or will be, whereas normative economics pertains to the assessment of economic equity and the articulation of policymakers' goals and desired outcomes.

History of Positive Economics

The inception of positive economics can be traced back to 1891 when the British economist John Neville Keynes introduced the distinction between positive and normative economics. He posited that positive economics concerns itself with "what is," while normative economics deals with "what ought to be."

Fast forward to 1947, American economist Paul A. Samuelson, hailing from Harvard University Press, published the seminal work "Foundations of Economic Analysis." In this influential book, he categorized statements within positive economics as "operationally meaningful theorems."

In 1953, another prominent American economist, Milton Friedman, elaborated on the methodology of positive economics in his book titled "Essays in Positive Economics." He clarified that this branch of economics strictly confines itself to descriptive observations and explanations, avoiding judgments or opinions, whether from individuals or experts.

This discipline's core objective is the empirical and factual portrayal of scenarios, leading to well-founded and globally applicable economic theories