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- Title
MONEY IN SEARCH EQUILIBRIUM.
- Authors
Diamond, P.
- Abstract
The paper studies a simple general equilibrium search model where money is used for all transactions. The model considers only steady state rational expectations equilibria. The difficulty of coordination of trade in a many person economy is the third cause of macro unemployment problems if prices and wages were fully flexible and correctly perceived. The trade process, the production process and the optimal individual production decisions are discussed. The rule for price determination and analysis of equilibrium are also covered in the paper. The model is discussed, extended and given an alternative interpretation in the concluding sections.
- Subjects
ECONOMIC equilibrium; MONEY; RATIONAL expectations (Economic theory); EMPLOYMENT; WAGES; INCOME; MANUFACTURING processes; UNEMPLOYMENT; ECONOMICS; MARKET equilibrium; ECONOMETRICS
- Publication
Econometrica, 1984, Vol 52, Issue 1, p1
- ISSN
0012-9682
- Publication type
Article
- DOI
10.2307/1911458