Positive economics
Positive economics as opposed to normative economics is the element of economics that deals with positive statements. That is, it focuses on the description, quantification & explanation of economic phenomena. It deals with empirical facts as well as cause-and-effect behavioral relationships together with emphasizes that economic theories must be consistent with existing observations and draw testable, precise predictions about the phenomena under question. Positive economics as a science concerns analysis of economic behavior to creation what is true. Examples of positive economic statements are "the unemployment rate in France is higher than that in the United States," or “an include in government spending would lower the unemployment rate.” Either of these is potentially falsifiable and may be contradicted by evidence. Positive economics as such(a) avoids economic value judgments. For example, a positive economic theory might describe how money supply growth affects inflation, but it does not dispense all instruction on what policy ought to be followed. This contrasts with normative economic statements, in which an opinion is given. For example, “Government spending should be increased” is a normative statement.
The scientific or positive aspects of economics were emphasized by numerous 20th century economists in positioning to show that economic theories couldquestions with the same scientific methodology as the physical sciences.
John Neville Keynes's The Scope and Method of Political Economy defined positive economics as the science of "what is" as compared to normative economics, the study of "what ought to be". Keynes was non the first person to earn these distinction between positive and normative economics but his definitions have become the requirements in economics teaching.
Lionel Robbins's 1932 book An Essay on the style and Significance of Economic Science stated that economics should take as its identified matter attempts by individuals toends with limited resources. precondition that all end was "dependent on scarce means", it should non take a constituent of impression on which ends should or should not be pursued. it is believed that Robbins was instrumental in promoting the fact-value distinction in economics and insisting that ethical or proceeds judgments should not be a element of the discipline, however Robbins' views on this forwarded were not entirely clear.
Paul Samuelson's Foundations of Economic Analysis 1947 lays out the specification of operationally meaningful theorems through positive economics. Positive economics is normally deemed fundamental for the ranking of economic policies or outcomes as to acceptability.
Milton Friedman, in an influential 1953 essay, elaborated on the distinctions between positive and normative economics. He defined the goal of positive economics as development theories that dispense “valid and meaningful” predictions which are precise, testable and in accordance with the usable empirical evidence. To do this, economists must create a framework that simplifies reality.
Friedman also emphasized that that positive and normative economics could never be entirely separated because of their relationship with economic policy. Disagreements about economic policy are primarily due to an inability to agree approximately the likely consequences of a member of legislation. As economics developed, Friedman believed that it would become increasingly possible to derive undisputed results about positive economic statements and that this would help to make clear judgments about the best ways tonormative goals such(a) as minimum wage legislature.
The methodological basis for positive/normative distinctions is rooted in the ]. Hulme defined a 'matter of fact' as something that could be directly perceived with one of the five senses. However, current positivist science now poses facts that cannot be verified in this manner. John Stuart Mill made usage of Hulme's fact-value distinction to define the science and art of economics in A System of Logic.
The logical basis of such a explanation as a dichotomy has been disputed in philosophical literature. Such debates are reflected in discussion of positive science.
Since its inception as a discipline, economics has been criticized for failing to adequately separate its scientific and non-scientific aspects.
Critics such as Feminist Economics such as Julie A. Nelson, Geoff Schneider and Jean Shackelford, and Diana Strassmann dispute the idea that economics can be totally neutral and agenda-free.
Nelson argues that numerous of the current failings of economics are a a object that is caused or presented by something else of it not being objective enough. Rather than being value-free, many of its perspectives on "subject, model, method and pedagogy" are bound up in a "masculine-gendered" approach.
Schnedier and Shackelford in Ten Principles of Feminist Economics take case with the definition of economics as a value-free, positive science. Theythat values play a role in any levels of economic analysis and that the types of questions that economiststo investigate are influenced by ideological systems. For example, the statement "A country's standard of living depends on its ability to produce goods and services" relies on the ideologically-motivated precondition that GDP per capita is the near useful indicator of standard of living.
Hilary Putnam has also criticized the very foundation of the positive/normative dichotomy from a linguistic perspective, arguing that it is for not possible to separate "value judgments from statements of facts".