Some examples of
ceteris paribus conditions commonly employed in economics include: • The number of consumers in the market • Consumer tastes or preferences • Prices of substitute goods • Consumer price expectations • Personal income
History in economics Ceteris paribus has been relevant in economics for centuries, dating back to its first traces in 1295 by
Peter Olivi. In the 16th century, Juan de Medina and Luis de Molina of the
School of Salamanca first used “ceteris paribus” when discussing economic issues. The earliest case of the Latin phrase being used in the English language publications was in the 17th century by
William Petty, who used the clause to condition his labour theory of value. Economist
John Stuart Mill’s use of the Latin phrase had significant influences as he characterised economy through how it managed troubling factors. Economist
Alfred Marshall had significant effects on the popularity for the ceteris paribus clause in the 19th century. It was his support to economics where he promoted partial equilibrium analysis, claiming that this analysis, and similar analysis’ hold due to the ceteris paribus clauses. The other use of the ceteris paribus clause is to see it as a means for obtaining an approximate solution. Here it would yield a substantive isolation. •
Law of supply and demand. The law of demand states that, when prices rise the demand of goods fall, whilst the law of supply dictates that as prices rise sellers are more willing to supply. When these laws interrelate market prices and supply in the market are determined. Ceteris paribus is used in the law of supply and demand through determining how independent variables will impact the casual factors of prices and supply in the market. Ceteris Paribus is also inherently limited by what has been learned in complexity science about those situations which are highly affected by interconnections. Amid highly connected situations, a change to any one variable will change all others. In this way, when these complex connections are active, it is not possible in reality to hold all other values constant. Complex interconnected reality is not only common in physical and natural sciences but is of great influence in most socio-economic sciences. ==See also==