conomists have a favourite way of taming complexity: assume the rest of the world stands still. Ceteris paribus - all else being equal - lets us trace one relationship at a time through the noise of economic reality. The trouble is that the world rarely obliges. In Issue 36 of The Economic Tribune, “When Ceteris Isn’t Paribus”, we turn our attention to what happens when everything moves at once.

The tidy assumptions that underpin our models - constant technology, stable and unchanging institutions, rational actors making rational choices - are being stress-tested in real time...click to read more