"Economic Geography" is the most complete, up-to-date textbook available on the important new field of spatial economics. This book fills a gap by providing advanced undergraduate and graduate students with the latest research and methodologies in an accessible and comprehensive way. It is an indispensable reference for researchers in economic geography, regional and urban economics, international trade, and applied econometrics, and can serve as a resource for economists in government."Economic Geography" presents advances in economic theory that explain why, despite the increasing mobility of commodities, ideas, and people, the diffusion of economic activity is very unequal and remains agglomerated in a limited number of spatial entities. The book complements theoretical analysis with detailed discussions of the empirics of the economics of agglomeration, offering a mix of theoretical and empirical research that gives a unique perspective on spatial disparities. It reveals how location continues to matter for trade and economic development, yet how economic integration is transforming the global economy into an economic space in which activities are performed within large metropolitan areas exchanging goods, skills, and information."Economic Geography" examines the future implications of this evolution in the spatial economy and relates them to other major social and economic trends. It provides a complete introduction to economic geography and explains the latest theory and methodologies. It covers the empirics of agglomeration, from spatial concentration measurement to structural estimations of economic geography models. It includes history and background of the field and serves as a textbook for students and a resource for professionals.
Foreword
Acknowledgments
I Facts and Theories 1
1 Spatial Inequalities: A Brief Historical Overview 3
1.1 The Space-Economy and the Industrial Revolution 4
1.2 Regional Disparities: When an Ancient Phenomenon Becomes Measurable 12
1.3 Concluding Remarks 25
2 Space in Economic Thought 26
2.1 Economics and Geography: A Puzzling History of Reciprocal Ignorance 27
2.2 Integrating Space in Economics: The Main Attempts 30
2.3 The Burden of Modeling Constraints 31
2.4 The Breakdown of the Competitive Paradigm in a Spatial Economy 35
2.5 What Are the Alternative Modeling Strategies? 41
2.6 Increasing Returns and Transport Costs: The Basic Trade-Off of Economic Geography 43
2.7 Concluding Remarks 48
II Space, Trade, and Agglomeration 51
3 Monopolistic Competition 53
3.1 The Dixit-Stiglitz Approach 55
3.2 Monopolistic Competition: A Linear Setting 71
3.3 Concluding Remarks 79
3.4 Related Literature 80
4 Interregional Trade and Market Size 81
4.1 The Dixit-Stiglitz-Krugman Model of Trade 82
4.2 The Home-Market Effect 89
4.3 Concluding Remarks 98
4.4 Related Literature 100