Positive Economics

Positive economics is concerned with the description of economic events. It formulates the theories to explain them. It tries to follows scientific principles, devices and objective test of these theories. According to David Begg and others, “positive economics deals with objective or scientific explanations of the working of the economy”

In brief, positive economics studies how the economy actually behaves. The aim of positive economics is to explain how the society makes decisions about consumption, production, exchange and distribution of goods and services. In positive economics, there is no scope for personal value-judgments. We are concerned with propositions of the firm such as if this is changed, then that will happen. In other words, it is concerned with ‘what is’, ‘what was’ and ‘what will be’. For example, what determine the wage rate for unskilled workers? What would happen if we abolished the corporate income tax? The answer to such questions is the subject of positive economics.

It attempts to understand behavior and the operation of economic system without making value judgments about whether the outcomes are good or bad. It tries hard to describe what exists and how it works.