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Of Hype and Hyperbolas: Introducing the New Economic Geography

  • J.Peter Neary

Reviewing The Spatial Economy by Fujita, Krugman, and Venables, this paper argues that the key contribution of the new economic geography is a framework in which standard building blocks of mainstream economics (especially rational decision making and simple general equilibrium models) are used to model the trade-off between dispersal and agglomeration. The approach thus gives a choice-theoretic basis for a "propensity to agglomerate."

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jel.39.2.536
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Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 39 (2001)
Issue (Month): 2 (June)
Pages: 536-561

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Handle: RePEc:aea:jeclit:v:39:y:2001:i:2:p:536-561
Note: DOI: 10.1257/jel.39.2.536
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  11. Midelfart-Knarvik, K.H. & Overman, H.G. & Venables, A.J., 2000. "Comparative Advantage and Economic Geography: Estimating the Location of Production in the EU," Papers 18/00, Norwegian School of Economics and Business Administration-.
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