Structural disequilibrium occurs due to business cycles.

A business cycle is a series of fluctuations in economic activity that an economy experiences over time. These fluctuations are characterized by expansionary phases (economic growth and increased employment) followed by contractionary phases (economic recession and increased unemployment).

Structural disequilibrium occurs when there is a persistent imbalance between the supply and demand for labor in the economy. This can result in high levels of unemployment, unsatisfied demand for skilled workers, and low labor force participation.

The main causes of structural disequilibrium can be: 1. Technological changes: Rapid technological advancements may outpace the ability of workers to adapt to new skills, rendering their existing skill sets obsolete and leading to a mismatch of skills in the job market. 2. Changes in consumer preferences: Shifts in consumer preferences may lead to a decline in demand for certain products and services, causing a corresponding decline in the demand for labor in affected industries. 3. Global competition and outsourcing: Increased global competition and the outsourcing of jobs to countries with lower labor costs can lead to reduced domestic demand for labor in certain industries. 4. Government regulations and policies: Strict regulations and policies may hinder the entry of new firms or the growth of existing firms in certain sectors, leading to a reduction in demand for labor.

Structural disequilibrium can have multiple negative effects on the economy, such as: 1. High unemployment: A persistent mismatch between the supply and demand for labor can lead to high levels of unemployment, especially among those in industries facing structural changes. 2. Reduced economic growth: High unemployment and a lack of skilled workers may negatively impact economic growth, as potential output is not being realized. 3. Inequality: Structural disequilibrium can lead to increased income inequality, as some workers are unable to find suitable employment or must accept lower-paying jobs. 4. Fiscal strain: High unemployment can result in increased government spending on social benefits, leading to a strain on public finances.

Some possible solutions to address structural disequilibrium include: 1. Education and training programs: Governments can invest in education and training programs to equip workers with new skills, helping them adapt to the changing job market. 2. Support for job creation: Policies that encourage entrepreneurship and support job creation in industries with a high demand for labor can help alleviate structural disequilibrium. 3. Market-oriented policies: Governments can implement market-oriented policies, such as deregulation and reduction of trade barriers, to promote competition and stimulate economic growth. 4. Income support policies: Governments can employ income support policies, such as unemployment insurance and welfare programs, to help individuals who are temporarily displaced because of structural changes find new employment opportunities.