ceteris paribus definition in economics
Definition of ceteris paribus. Ceteris paribus is a Latin phrase meaning âall other things remaining equalâ. The concept of ceteris paribus is important in economics because in the real world it is usually hard to isolate all the different variables. An increase in interest rates will âceteris paribusâ cause demand for loans to fall. (Higher interest rates increase the cost of borrowing so there will be less demand for loans.