Economic Methodology: Paradox of Ceteris Paribus Law in the Context of Sierra Leone

ABSTRACT

Research in the subject area of economics (as a social science) has defined its ontologie of scientific investigation through economic methodology; a philosophical approach entailing the proviso of empirical evidence and backed by an understanding of human interaction in their natural habitat. The contention of economic methodology being refuted for its non-scientific means of investigation and particularly with the application of Ceteris Paribus (CP) law, has been critically addressed in this article, with Sierra Leone as a case example. Sierra Leone is a complex economy and issues surrounding the assumption of CP has been brought to the fore, with a view of the political economy structure being made transparent so as to make it possible for economists to address critical issues surrounding corruption (exogenous factors), not accounted for in econometric modelling. This is not necessarily that which is considered as the most obvious, with the use of CP concept, for example, the influence of naturally occurring incidents like adverse weather conditions, flooding and earthquakes.

RÉSUMÉ

La recherche dans le domaine de l'économie (en tant que science sociale) a défini son ontologie de l'investigation scientifique par la méthodologie économique, une approche philosophique impliquant la condition de la preuve empirique et soutenue par une compréhension de l'interaction humaine dans leur habitat naturel. L'argument de la méthodologie économique qui a été réfuté à cause de ses moyens d'investigation non scientifiques, et notamment avec l'application de la loi Ceteris Paribas (CP), a été traité de manière critique dans cet article avec la Sierra Leone comme étude de cas. La Sierra Leone a une économie complexe et les problèmes en ce qui concerne l'hypothèse du CP ont été mis en évidence, avec une vision que la structure de l'économie politique devait se faire transparente afin de permettre aux économistes de résoudre des problèmes critiques sur la corruption (facteurs exogènes), non tenus en compte dans la modélisation économétrique. Il ne s’agit pas forcément de ce qui est considéré comme le plus évident, avec l'utilisation du concept de CP, par exemple, l'influence des incidents naturels comme les conditions météorologiques défavorables, les inondations et les tremblements de terre.

KEYWORDS:

• Ceteris Paribus
• economic methodology
• paradox
• epistemology
• ontology
• philosophy
• Sierra Leone

MOTS-CLÉS:

• Ceteris Paribus
• méthodologie économique
• paradoxe
• épistémologie
• ontologie
• philosophie
• Sierra Leone

Disclosure statement

No potential conflict of interest was reported by the author.

Disclaimer

The views expressed in this paper are those of the author and do not represent the official position of the University of Birmingham and Bank of Sierra Leone.

ORCID

Emerson Abraham Jackson http://orcid.org/0000-0002-2802-6152

Notes

1. The concept as used in Economics is an unpredictable event that brings about significant change in an economy; their occurrences are unpredictable and can bring about change in market forces involving demand and supply in the commodity market. Shock comes in different forms (effect of natural disasters such as adverse weather conditions and human involvement such as smuggling, hoarding) and which may impact on simple prices of commodities and even the financial market, leading in most cases to either an increase or a decrease in currency exchange rates.

2. Shocks as used in this context refer to a complex situation and in many cases undecided outcome of events. It is a social process (Cuomo and Labate, n.d.) which cannot be easily decided upon due to the complex behavioural dispositions likely to be manifested by people, while on the other hand, its outcome cannot be easily determined due to the prevalence of natural occurrences.

3. The use of this term is tied with Britain’s exit from the EU and for which the ramifications are enormous, both for the UK and the EU economies.