In the power system small disturbances are continuously occurring in the power system which are small enough to not to cause the system to lose synchronism. The system is said to be dynamically stable if the oscillations do not acquire more than certain amplitude and die out quickly.
In dynamically unstable system the oscillation amplitude is large and these persist for a long time. The kind of instability behavior constitutes a serious threat to the system security and create very difficult operating conditions. Dynamic stability can be significantly improved through the use of power system stabilizer. Dynamic system study has to be carried out for 5-10 seconds and some times up to 3 seconds. Computer simulation is the only effective means of studying dynamic stability problem.