Positive economics

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Positive economics is the branch of economics that concerns the description and explanation of economic phenomena (Wong, 1087, p. 920). It focuses on facts and cause-and-effect relationships and includes the development and testing of economics theories. Earlier terms were value-free economics and its German counterpart wertfrei economics. These terms were challenged as persuasive rather than descriptive.

Positive economics as science (Robbins, 1932) concerns analysis of economic behavior. A standard theoretical statement of positive economics as operationally meaningful theorems is in Paul Samuelson (1947). Positive economics as such avoids economic value judgments. For example, a positive economic theory might describe how money-supply growth affects inflation, but it does not provide any instruction on what policy should be followed.

Still, positive economics is commonly deemed necessary for the ranking of economic policies or outcomes as to acceptability (Wong, 1987, p. 921), which is normative economics. Positive economics is sometimes defined as the economics of "what is", whereas normative economics discusses "what ought to be". The distinction was exposited by John Neville Keynes (1891) and elaborated by Milton Friedman in an influential essay (1953).

The metholodogical basis for a positive/normative distinction has its roots in the fact-value distinction in philosophy, the principal proponents of such distinctions being David Hume and G. E. Moore. The logical basis of such distinctions has been disputed in the philosophical literature. Such debates are reflected in discussion of positive science and specifically in economics, where critics, such as Gunnar Myrdal (1954) dispute the idea that economics can be completely neutral and agenda-free.

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Milton Friedman (1953). "The Methodology of Positive Economics," Essays in Positive Economics
Daniel M. Hausman and Michael S. McPherson (1996). Economic Analysis and Moral Philosophy, "Appendix: How could ethics matter to econonics?", pp. 211-20:

A.2: Objection 2: Positive economics is value-free

A.3: How positive economics involves morality

Gunnar Myrdal (1954[1929]). The Political Element in the Development of Economic Theory, trans. Paul Streeten (Cambridge, MA: Harvard University Press).
Lionel Robbins (1932). An Essay on the Nature and Significance of Economic Science
Paul A. Samuelson (1947, Enlarged ed. 1983). Foundations of Economic Analysis
Stanley Wong (1987). “positive economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 920-21