Q:

What is economic disequilibrium?

A:

Quick Answer

Economic disequilibrium is a state where market equilibrium is unreachable due to internal or external variables. Disequilibrium can also occur when internal or external variables result in a disruption to the balance in the market. It is also a result of long-term structural imbalances or short-term changes in market variables.

Continue Reading

Full Answer

Economic disequilibrium was originally suggested as part of a theory developed by the economist John Maynard Keynes. Keynes noted in his theory that most markets are often in a state of disequilibrium to some degree. In the real world, variables affecting the market are numerous, and it is unlikely that true economic equilibrium can be achieved outside of an economic model.

Learn more about Economics
Sources:

Related Questions

Explore