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Of hype and hyperbolas : introducing the new economic geography

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  • J. Peter Neary

Abstract

I take the publication of The Spatial Economy by Fujita, Krugman and Venables as an opportunity to expound and assess the "new economic geography". I use a simple diagram to show how the basic model works; give a self-contained algebraic derivation of the main results; note some interesting extensions; comment on some weaknesses of the model, which make it less suitable than might at first appear for discussing issues of industrial structure; try to place the field in relation to "old" economic geography and to the theory of international trade; and discuss its empirical and policy implications.

Suggested Citation

  • J. Peter Neary, 2000. "Of hype and hyperbolas : introducing the new economic geography," Working Papers 200019, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:200019
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    File URL: http://hdl.handle.net/10197/1315
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    More about this item

    Keywords

    Agglomeration; Dixit-Stiglitz preferences; Economic geography; Increasing returns to scale; Pecuniary externalities; Economic geography; Industrial organization (Economic theory); Dependency--Econometric models;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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