The authors examine the rational expectations equilibrium paths of the model of search and barter in Peter A. Diamond's "Aggregate Demand Management in Search Equilibrium" (1982). For some initial positions, there are two equilibrium paths converging to different steady states, with the...

Presents a correction to an article on rational expectations in business cycles.

We examine the rational expectations equilibrium paths of the model of search and barter in Diamond's "Aggregate Demand Management in Search Equilibrium." For some initial positions, there are two equilibrium paths converging to different steady states, with the high-activity path...