Definition of Ceteris paribus:
Ceteris paribus, literally "holding other things constant," is a Latin phrase that is commonly translated into English as "all else being equal." A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same.
In the fields of economics and finance, ceteris paribus is often used when making arguments about cause and effect. An economist might say raising the minimum wage increases unemployment, increasing the supply of money causes inflation, reducing marginal costs boosts economic profits for a company, or establishing rent control laws in a city causes the supply of available housing to decrease.
With other conditions remaining the same.
Constraint introduced into an argument or assertion to allow one variable to change while keeping other variables constant, such as, If we reduce our prices by X percent, ceteris paribus, our sales revenue should go up by Y percent. Latin for, all other things being equal.
How to use Ceteris paribus in a sentence?
- Ceteris paribus is a Latin phrase that generally means "all other things being equal.".
- My father informed his colleagues that while he would change one aspect of the deal, ceteris paribus , our total revenue would remain steady.
- Shorter hours of labor will, ceteris paribus, reduce the volume of output.
- Many economists rely on ceteris paribus to describe relative tendencies in markets and build and test economic models, although it is not without flaws.
- In economics, it acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.
- We relied on ceteris paribus to give our equation the most use for its future presentation to the board of directors.
- If things or going well but you think a small tweak may make it better try a ceteris paribus and see how it goes.
Meaning of Ceteris paribus & Ceteris paribus Definition