Economic Models and Ceteris Normalibus Laws

This paper focuses on the nature of economic laws. Rather than conceptualizing such laws in ceteris paribus terms, it claims that economic laws should be read using ceteris normalibus clause, namely that they are only valid in normal conditions. Two understandings of such conditions are proposed. First, economic laws are always true in appropriate theoretical models. Also, the closer a given empirical domain to the model’s structure is, the higher probability that the model’s insights (i.e., economic laws) are to correctly explain the workings of such a domain. Nevertheless, isomorphism between models and empirical domains is never perfect and thus economic laws only describe tendencies in economic realm. Here comes second understanding of economic laws, precisely they do not describe regularities but they refer to capacities and powers. They state what is in nature of a given factor to produce. Thus such economic laws are normic laws. While investigating the nature of economic laws this paper also offers a brief study of the history of ceteris paribus clause in economics as well as it refers to an interesting debate on the nature of economic models and laws which is offered in D. Rodrik’s 2015 book Economics Rules.