Disequilibrium Theory

(20th century)

Found in the work of English economist John Maynard Keynes (1883-1946), disequilibrium theory refers to a situation in which market equilibrium has not been reached or where there is a tendency for variable factors to change.

Keynes believed that an economy has a natural inclination towards disequilibrium.

Also see: equilibrium theory, general equilibrium theory, partial equilibrium theory, fundamental disequilibrium, classical macroeconomic model, law of markets, cobweb theory

Source:
J M Keynes, The General Theory of Employment, Interest and Money (New York, 1936);
J D Hey, Economics in Disequilibrium (Oxford, 1981)

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