Positive Economics

Positive economics is a branch of economics that is concerned with the cause-and-effect relationship between economic phenomena. It involves the study of economic facts, theories, and data with the aim of establishing objective and verifiable statements about economic phenomena. Positive economics is descriptive in nature and seeks to explain what is, rather than what ought to be.

Features of Positive Economics

1. Objective: Positive economics is objective as it is based on data and facts that can be tested and verified.

2. Descriptive: It describes what is happening in the economy and is not concerned with normative judgments or opinions about what should be happening.

3. Scientific: Positive economics uses the scientific method and relies on empirical evidence to test economic theories and hypotheses.

4. Predictive: Positive economics seeks to make predictions about future economic events based on past and current trends.

Examples of Positive Economics

1. The law of supply and demand: This is a positive economic theory that explains how the price of a good or service is determined by the interaction of supply and demand.

2. The theory of comparative advantage: This is a positive economic theory that explains why countries specialize in producing certain goods and services and trade with each other.

3. The Phillips curve: This is a positive economic theory that explains the relationship between unemployment and inflation.

Conclusion

Positive economics is an important branch of economics that helps us to understand the cause-and-effect relationship between economic phenomena. It is based on empirical evidence and seeks to establish objective and verifiable statements about the economy. By studying positive economics, we can make better-informed decisions and policies that are grounded in fact and evidence.