In both economies and markets, instability and disequilibrium are normal; stability and equilibrium are not.
Any disequilibrium or economic crisis that occurs is the result of constraints imposed on the market from outside.
Unfortunately, there is no price-adjustment interpretation of the disequilibrium prices along the homotopy path.
In contrast to equilibrium theories, disequilibrium theories suggest that income differences among regions are likely to persist and even widen over time.
The origins of this disequilibrium are to be found in economic processes going back more than a decade.
But one thing can be said with certainty: the longer the world economy continues on the present path, the greater will be the underlying disequilibrium and the possibility of a major financial crisis.
For that purpose, the balance sheet approach seemed preferable, if not ideal, because balance sheet relationships hold even in disequilibrium .
If you pick up any elementary text, if the market is in disequilibrium , the reflex reaction is that when demand is in excess, prices will rise and that will eliminate the excess demand.
They can obtain resources to finance cyclical downturns and balance-of-payments disequilibria , thus allowing them to smooth out consumption.
Financial flow imbalances, if allowed to persist, lead to stock disequilibria on balance sheets.