ceteris paribus


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Ceteris Paribus

Literally, a Latin phrase meaning "with other things the same." In economic and financial models, ceteris paribus is a shorthand indicating that the model holds true if other market forces do not intervene. One often finds "ceteris paribus" in simple models and in simplifications of complex models. For example, one might say: "If supply decreases, price increases, ceteris paribus." The statement is true assuming constant (and substantial) demand regardless of supply, among other factors. Ceteris paribus acknowledges other facts without letting them overwhelm the point of the model.

ceteris paribus

a Latin term meaning ‘other things being equal’ that is widely used in economic analysis as an expository technique. It allows us to isolate the relationship between two variables. For example, in demand analysis, the DEMAND CURVE shows the effect of a change in the price of a product on the quantity demanded on the assumption that all of the ‘other things’ (incomes, tastes, etc.) influencing the demand for that product remain unchanged.
References in periodicals archive ?
A hypothetical increase of the base case PD by 50% and LGD by 25%, ceteris paribus, would lead to a downgrade of the Class A Notes to A (high) (sf).
Accordingly, the index of the average value of the overall cost of living in state j, COSTj, is hypothesized to be a decreasing function of the degree of labor freedom in state j as measured/reflected by MINWAGEj, GOVTEMPj, and UNIONj, ceteris paribus. (3)
Proposition 2: Ceteris paribus, appreciation of the host country currency against the home country currency persuades foreign subsidiaries to repatriate higher dividends and vice versa.
Therefore, economists usually isolate the relationship between variables on the assumption that all the other factors are constant.In the real world though, ceteris paribus does not exist.
B4=0.45, is a partial regression coefficient of land size and tell us the influence of land size on the maize production ceteris paribus. This means that if labor used increases by 1unit, then the yield will increase by 0.45 kg.
Machaj grants Hulsmann's basic point that we can weaken this strict ceteris paribus rule towards a counterfactual rule, because even with other factors (A, B, C, D) influencing K, we can still know that the increase in T led to a lower level of K than otherwise would have been the case.
Ceteris paribus: the evolution of the clinical trial.
Consequently, it is hypothesized that the higher the percentage of the population that is age 65 and older (AGE65PLUS), the greater the overall rate of voter turnout, ceteris paribus.
H1: The Indian consumers, ceteris paribus, are likely to perceive no difference in the trustworthiness of Mydala, Snapdeal, and Dealsandyou online group buying sites.
In theory, this is true only if all other things remain the same, or as economists would say "ceteris paribus".
In this respect, ceteris paribus, the demographic trend is set to weigh on share prices over the coming decades.
However, the most basic assumption of all comparisons, in economics and every other scientific discipline, is ceteris paribus, which is "all or other things being equal or held constant" in Latin.