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.
No takes yet. Share an insight, caveat, or question.
Peter Diamond (1982) studied this question.
Synapse has enriched 5 related papers. Consider them for comparative context: