Ans.
Balance of Payment is a systematic records of
economic transactions between Resident of a country & Rest of world. In
accounting sense BOP always tallys. However in realistic sense Balance of
Payment does not tally. Thus we can say that disequilibrium in Balance of
Payment is existence of Surplus or Deficit in BOP. The disequilibrium of BOP
can be classified into various types.
a. Cyclical Disequilibrium:-
The disequilibrium, which arises because of
changes in the trade cycle, is referred as Cyclical Disequilibrium. Changes in
the economic conditions either in domestic economy or in international economy
will result into Cyclical Disequilibrium.
Eg. : In case of recovery & prosperity, the economic activities are rising
as such the prices in domestic economy will also rise. In turn, it will result
into unfavorable BOP. On the other hand in case of recession & depression
there will be fall down of prices which may result into favorable
equilibrium.
b. Structural Disequilibrium :-
The disequilibrium that arises on account of
structural changes relating to imports & exports is known as structural
disequilibrium.
Eg. : The exports of commodity on account of synthetic substitutes for the
same. As such it has resulted into structural disequilibrium.
c. Short run Disequilibrium
It refers to the disequilibrium which exist
into the economy on account of some temporary problems like natural calamity,
political instability etc. Such Disequilibrium is also called as temporary
disequilibrium & the government need not take special measures to deal with
this problems.
d. Long Run Disequilibrium
It refers to disequilibrium, which persists
in the economy over long period. Such disequilibrium exists on account of
imbalance between exports and imports. This disequilibrium is also called as
fundamental disequilibrium or secular disequilibrium. It shall be noted that
government is required to take adequate steps to solve this problem.
e. Exchange Rate Disequilibrium
The Disequilibrium which arises on account of
imbalance in the rate of exchange shall be referred as rate of exchange
disequilibrium. Such disequilibrium exist through out the world & it occurs
because of over valuation & under valuation of the currency.
