Disequilibrium

noun (countable/uncountable)

/ˌdɪsˌiːkwɪˈlɪbriəm/

A state in which the market-clearing forces of supply and demand are not in balance, resulting in persistent excess supply (surplus) or excess demand (shortage) at prevailing prices; more broadly, any condition of macroeconomic imbalance such as persistent current account deficits, inflation, or unemployment. In Keynesian macroeconomics, the labour market can persist in disequilibrium (unemployment) because wages are downwardly rigid. India's agricultural markets frequently exhibit structural disequilibrium — chronic mismatch between MSP-driven production incentives and actual consumer demand — contributing to food price volatility.

✍️ Usage in a UPSC answer

India's agricultural commodity markets exhibit a persistent structural disequilibrium — MSP announcements stimulate surplus paddy and wheat production while demand for pulses and oilseeds remains unmet — distorting price signals across the food supply chain.

Synonyms

imbalancemarket failuremarket distortionmacroeconomic instabilitymarket disequilibrium

Antonyms

equilibriummarket clearingbalancestabilityWalrasian equilibrium

🌱 Word Family

disequilibrate (verb), disequilibrating (adjective), equilibrium (noun, antonym), disequilibria (plural noun)

🔡 Root

Latin dis- = apart, negation + Latin aequus = equal + libra = balance

📜 Etymology

Formed from Latin dis- (negation) and aequilibrium (equal balance), from aequus (equal) and libra (scales, balance). As a physical term, it denotes a body out of balance; economists adopted it in the 19th century to describe deviations from competitive equilibrium. Keynesian economics made macroeconomic disequilibrium a central analytical concept in the 1930s.

🧠 Memory Hook

DIS-EQUILIBRIUM = DISTURBED balance. Think of scales (LIBRA) with one side DISTORTED (DIS) by too many goods or too little demand. The market's scales are unbalanced.

💰 Indian Economy 📖 Seen in: Indian Economy — Growth, Planning & De...

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