This note studies the trade of indivisible goods using credit or money in a frictional market.
We show how indivisibility matters for monetary equilibrium under different assumptions
about price determination. Bargaining generates a price and allocation that are independent
of the nominal interest or inflation rate over some range. This is not the case with price
posting and directed search. In either case, we provide conditions (the nominal rate cannot
be too high) under which stationary monetary equilibrium exists, and we show it is unique or …