Aggregate Demand Management in Search Equilibrium
Journal of Political Economy
1982
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.
- DOI
- 10.1086/261099
- Volume
- 90 (5)
- Pages
- 881-894
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref