Positive Economics

Positive economics is a division of economics that describes and explains an economic phenomenon. This study highlights on facts and the cause-result relations. It also involves in the test and evolution of economic theories. As a science, positive economics focuses on the study of economic behavior. Positive economic statements are usually operationally meaningful theorems. Value judgments are mostly avoided in positive economic studies. The fact value distinction allows one to understand better about positive and normative economics distinction. Positive economic studies usually reasons its statements with proper proofs. In this study, evidence is summarized based on its validity and assessment of relative confidence.

Relation between positive and normative economics

The distinction between positive economics and normative economics would help a scholar in economics to know better about economics in general. While positive economic studies are more factual, normative economics is judgment based. The implications of factual statement or positive economics are made comprehensive to a normal man by normative statements. A particular economic policy cannot satisfy everyone at a time. Therefore normative statements are frequently expected. Morality and rationality are two ethics which need to be preserved in Positive economics. Positive economic studies are also termed as value free economics. When positive economic studies mark how money supply growth influences inflation, it does not suggest or recommend any instruction that should be followed.

While positive economics can be independent of normative economics, normative economics cannot be independent of positive economics. Any policy speaks about a prediction and the consequences. That prediction happens to be positive economics.  Positive economics consists of statements which can be accepted or questioned with facts. These statements are predictions about economic relationships. As long as an evidence and reason are available, positive economic statements are possible. Normative statements are important in positive economic observations because they assure the validity of observations found in positive economic s.

Benefits of positive economic studies

While normative economists suggest certain economic goals, positive economist helps in achieving the same goal by certain step of methods. For instance, if minimizing unemployment is a goal, positive economist produces the statistics of unemployment and how certain factors could avert the possibilities of unemployment. Positive economics consists of scientific statements which are objective and verifiable. While one could not point out the demarcating line between positive and normative economics, one could not deny it either. The questions that normative economists ask help in shaping facts in economics.

Questions:

• What is positive economics?
• How are positive and normative economics inter related?