1982/10/01 by Peter Diamond · 2 citations
Economics, Econometrics and Finance · Mathematics · #Economic theories and models #Monetary Policy and Economic Impact #Economic Theory and Policy #Barter #Economics #Aggregate (composite) #Unemployment #General equilibrium theory #Mathematical economics #Matching (statistics) #Simple (philosophy) #Rational expectations #Microeconomics #Econometrics #Mathematics #Macroeconomics
paper · doi:10.1086/261099
openalex publication_date 1982/10/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
Equilibrium is analyzed for a simple barter model with identical risk-neutral agents where trade is coordinated by a stochastic matching process. It is shown that there are multiple steady-state rational expectations equilibria, with all non-corner solution equilibria inefficient. This implies that an economy with this type of trade friction does not have a unique natural rate of unemployment.