It emphasizes that economic theories must be consistent with existing observations and produce precise, verifiable predictions about the phenomena under investigation.
For example, a positive economic theory might describe how money supply growth affects inflation, but it does not provide any instruction on what policy ought to be followed.
[2] Some earlier technical problems posed in welfare economics have had major impacts on work in applied fields such as resource allocation, public policy, social indicators, and inequality and poverty measurement.
[6] The fierce commentary of Lionel Robbins in the 1930s, who argued that normative economics was wholly unscientific and should therefore be cast out of the field, were particularly influential for a time.
[6] According to Friedman, the ultimate goal of a positive science is to develop a "theory" or "hypothesis" that makes meaningful predictions of a phenomenon that is not yet examined.
Hilary Putnam has criticized the foundation of the positive/normative dichotomy from a linguistic perspective, arguing that it is not possible to completely separate "value judgments from statements of facts".
They cite evidence showing that descriptive statements have a strong effect on policy prescriptions, and that economics education tends to substantially affect both.