The purpose of this essay is to analyze the circumstances where a monetary economy dominates over a redistributive barter economy in which there is not an absence of double coincidence of wants problem. For this purpose, we develop a spatial general equilibrium model where individuals must trade...

The main goal of this essay is to provide microfoundations in a spatial general equilibrium framework for the fact that individuals use money to make transactions, and hence microfoundations for the cash in advance constraint. We analyze the emergence of a monetary economy out of a...