Marshall's ceteris paribus in a dynamic framework
|Title||Marshall's ceteris paribus in a dynamic framework|
|Publication Type||Working Paper|
|Year of Publication||2005|
|Keywords||ceteris paribus, dynamics, marshall, partial equilibrium|
The paper aims to propose a formalization of the concept of ceteris paribus (CP) by means of a dynamic model. The basic result of the analysis is that the CP clause may assume essentially different meanings according to (1) the kind of variables assumed to be ”frozen” and (2) the length of the time horizon. It is then possible to distinguish, respectively, between an historical and an endogenous CP and, within the latter, between a short-run and a long-run CP. This double analytical distinction helps in understanding the role the CP clause plays in economic dynamics. Finally, the notion of long-run CP seems to suggest an extension of the standard view of the CP concept: interpreted as dynamics on manifolds, it still reduces the degree of complexity of a system even if variables ”frozen” in it need not to be constant.