Disequilibrium
Definition of 'Disequilibrium'A situation where internal and/or external forces prevent market equilibrium from being reached or cause the market to fall out of balance. This can be a short-term byproduct of a change in variable factors or a result of long-term structural imbalances. |
|
Investopedia explains 'Disequilibrium'This theory was originally put forth by economist John Maynard Keynes. Many modern economists have likened using the term "general disequilibrium" to describe the state of the markets as we most often find them. Keynes noted that markets will most often be in some form of disequilibrium - there are so many variable factors that affect financial markets today that true equilibrium is more of an idea; it is helpful for creating working models, but lacks real-world validation. |
Related Definitions
Articles Of Interest
-
Explaining The World Through Macroeconomic Analysis
From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone. -
What's the difference between macroeconomics and microeconomics?
Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and government decisions. Macroeconomics and microeconomics, and their wide ... -
Economics Basics
Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more! -
Weighted Average Cost Of Capital (WACC)
Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality -
Exploring The Current Account In The Balance Of Payments
Learn how a country's current account balance reflects the country's economic health. -
What Is The Balance Of Payments?
The balance of payments helps countries to track how much money is coming in and how much money is going out. Learn more about BOPs here. -
Economic Indicators That Do-It-Yourself Investors Should Know
Understanding these investing tools will put the market in your hands. -
Taking Shots At CAPM
Find out why many investors think the capital asset pricing model is full of holes. -
George Soros: The Philosophy Of An Elite Investor
George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular. -
Understanding And Playing The Dow Jones Industrial Average
Learn strategies for investing in this price-weighted index and how to interpret its movements.
Free Annual Reports