Latin for Economists
To study economics in English, and perhaps in any language, you will need a few Latin phrases. Some remain indispensable because they provide essential meaning more economically than any English words. Others are simply part of the cultural heritage of economics.
"For this purpose" and, implicitly, for no other.
One of the worst sins in economics, in the eyes of some, is to engage in "ad hoc theorising" or adopting an "ad hoc procedure"; note that while ad hoc is strictly an adverbial phrase it has acquired adjectival status in English. Economists tend to be a bit sniffy about doing things ad hoc because science places a premium on generalisation: a model that explains only a single event, or a procedure that works only in unique circumstances, has little or no power to shed light on other events or circumstances. Bear in mind, however, that too much generalisation may also be a weakness if it results in models that, while perfectly general, fail to apply to any particular circumstances. An example of successful ad hoc theorising in economics is the Keynesian multiplier; it was very much an ad hoc empirical investigation that gave rise to the Phillips curve | Return To Top.
"Other things being equal" or "controlling for other variables", i.e. holding them constant.
This phrase crops up repeatedly in economic propositions, for example "ceteris paribus, a rise in aggregate demand will tend to bring about a rise in output"; in this case what is held constant is the price level. Exactly what is controlled in each case is something you will learn to judge from the context. The importance of ceteris paribus arises from the nature of economics as a science that is empirical but largely non-experimental. In a controlled experiment a proposition is tested by comparing outcomes for a "treatment group" with those for a "control group", the only difference between the two groups being the application of a single change that is predicted to have the desired outcome. Where controlled experiments are too costly, as is the case in many branches of economics, we perform thought experiments instead and call it theorising. In our heads, or on paper, we simulate what might happen to outcomes if, ceteris paribus, one variable is altered independently. Then we compare the results of theory with the historical data that may throw light on them | Return To Top.
Ex ante and ex post
"Before the event" and "after the event".
In economics we frequently theorise about the translation of plans, intentions, and expectations into outcomes. For example consumers formulate plans for personal consumption based on wealth and expected lifetime income; firms make plans for investment in plant and equipment based on forecasts of the markets for their products; governments plan their outlays on defence and welfare subject to expected tax revenues; workers negotiate their wages and salaries based on their forecasts of price inflation over the coming period; financial market operators trade in bonds and shares in response to asset price and profit forecasts. In all these cases plans may prove difficult or costly to implement and forecasts may prove wrong, so that outcomes differ from what people expected or intended. We use the term ex ante to describe what they intended or expected beforehand, thus "ex ante consumption", whereas "ex post consumption" refers to the realised outcome. Ex ante and ex post can be used both adjectivally and also as adverbs | Return To Top.
Per caput or per capita
Wealth, income, or any other stock or flow divided by the population of which it is an attribute, for example the stock of mobile telephones or the flow of sulphur emissions, gives rise to a statistic for the average level of wealth, income, mobile phones, or sulphur emissions per head. The use of "per head" is widespread; personally I prefer it. Some object, however, on the grounds that "per head" is a hybrid phrase: per is Latin while "head" is an English word, so the two are inconsistent. One alternative is per capita, both words being Latin and therefore supposedly of better fit. Unfortunately it is also bad Latin, since the preposition per takes the accusative case; capita is the genitive case of caput, the Latin word for "head"; the accusative is the same as the nominative, caput; purists therefore prefer per caput. The only place where the latter phrase may regularly be observed nowadays, for example "GDP per caput", is in the pages of the Economic History Review | Return To Top.
Post hoc, ergo propter hoc
"After this, therefore because of it".
This phrase expresses a common fallacy: the fact that Y has happened after X in time is a necessary condition for X to have caused Y, but it is not a sufficient condition. Those who are scientifically semi-educated may object that in quantum theory this condition is not even necessary, but let me assure you that the world of economics and the quantum world do not intersect. How to avoid the trap of post hoc, ergo propter hoc occupies much of the subject matter of statistics and econometrics, since it is important to to be able to test whether an occurrence of Y subsequent to X reflects a relationship between the two that is systematic or random and, if systematic, of what kind. That, thankfully, is another story | Return To Top.
My survival guide for department chairs
My notes on classical languages for economists
My take on life