Ceteris Paribus

What is Ceteris Paribus?

Ceteris Paribus is Latin for “all other things being equal.” It is usually used in situations to explain a causal relation between two variables while holding all exogenous factors constant. A classic Economics example would be if the price of apples increases – ceteris paribus – then the demand for apples will decrease. It means that if all other variables are held constant, and there is an increase in the price of apples, the demand for apples should decrease.

Additional Resources

CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI's mission is to help all professionals improve their technical skills. If you are a student or are looking for a career change, the CFI website has a multitude of free resources to help you jumpstart your Career in Finance. If you seek to improve your technical skills check out some of our most popular courses. Below are some additional resources for you to further explore:

 

The Financial Modeling Certification