The Spatial Economy: Cities, Regions, and International Trade
Abstract
The authors show how a common approach that emphasizes the three-way interaction among increasing returns, transportation costs, and the movement of productive factors can be applied to a wide range of issues in urban, regional, and international economics. Since 1990 there has been a renaissance of theoretical and empirical work on the spatial aspects of the economy—that is, where economic activity occurs and why. Using new tools—in particular, modeling techniques developed to analyze industrial organization, international trade, and economic growth—this "new economic geography" has emerged as one of the most exciting areas of contemporary economics. The authors show how seemingly disparate models reflect a few basic themes, and in so doing they develop a common "grammar" for discussing a variety of issues. They show how a common approach that emphasizes the three-way interaction among increasing returns, transportation costs, and the movement of productive factors can be applied to a wide range of issues in urban, regional, and international economics. This book is the first to provide a sound and unified explanation of the existence of large economic agglomerations at various spatial scales.
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Geographic distance (or transportation costs) plays a central role in the literature on trade and economic geography.
“Geographic distance (or transportation costs) plays also a central role in the literature on trade and economic geography(Fujita et al. 1999).”
From Economic reforms and industrial policy in a panel of Chinese cities (2016) · cites this paper as Fujita et al. 1999
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“First, the fact that the New Economic Geography concluded that agglomeration economies arise mainly at local level and decrease as distance increases (Fujita et al. 1999, Fujita and Thisse 2002).”
Background(How) Do (Firms in) Clusters Create Knowledge?
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“…recent years on the role of knowledge and innovation as key factors behind sustained industrial competitiveness has brought some of these core considerations of economic geography on to the research agenda in a wider community of economic scholars (Storper, 1995; Porter, 1998; Fuijta et al., 1999).”
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“In giving theoretical content to this residual, Grossman and Helpman (1991), Romer (1990) and Aghion and Howitt (1998) focus on technology, on better instructions for combining raw materials into useful products and services.”
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Páez, A., & Scott, D. M. (2004) · GeoJournal · doi:10.1007/s10708-005-0877-5 · Cited by 327 · see citing works
“Sources of theory include the 'new economic geography' (NEG) of regional science (Fujita et al., 1999), a field concerned with the spatial distribution of economic activity ; the economic theory of externalities, public goods and club goods (Cornes and Sandler, 1996 ); and the sociological concept…”
BackgroundAgglomeration Economies: Ambiguities and Confusions
Parr, J. B. (2002) · Environment and Planning A Economy and Space · doi:10.1068/a34106 · Cited by 326 · see citing works
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Landier, A., Nair, V. B., & Wulf, J. M. (2007) · Review of Financial Studies · doi:10.1093/rfs/hhm042 · Cited by 326 · see citing works
“1 For excellent reviews see Fujita and Venables (1999); Fujita and Thisse (2002), and Duranton and Puga (2005).”
Zipf's Law and the Growth of Cities
Gabaix, X. (1999) · American Economic Review · doi:10.1257/aer.89.2.129 · Cited by 324 · see citing works
Entrepreneurship in the Region: Breeding Ground for Nascent Entrepreneurs?
Mueller, P. (2006) · Small Business Economics · doi:10.1007/s11187-006-6951-7 · Cited by 320 · see citing works
Cultural economy: a critical review
Gibson, C., & Kong, L. (2005) · Progress in Human Geography · doi:10.1191/0309132505ph567oa · Cited by 320 · see citing works
“Observations of the agglomerative tendencies in activities within the cultural economy concur with work in what has been labelled ‘new geographical economics’ (Krugman, 1998; Fujita et al., 1999; Porter, 2002).”
BackgroundUnemployment clusters across Europe's regions and countries
Overman, H. G., & Puga, D. (2002) · Economic Policy · doi:10.1111/1468-0327.00085 · Cited by 319 · see citing works
Cohesion Policy in the European Union: Growth, Geography, Institutions
Farole, T., Rodríguez‐Pose, A., & Storper, M. (2011) · JCMS Journal of Common Market Studies · doi:10.1111/j.1468-5965.2010.02161.x · Cited by 319 · see citing works
“…transport costs and home market effects combine to favour the concentration of economic activity in ‘core’ regions, and how the advantages of large, flexible, highly specialized labour markets and localized technological spillovers reinforce these tendencies (Krugman, 1991; Fujita et al., 1999).”
Goods trade, factor mobility and welfare
Redding, S. J. (2016) · Journal of International Economics · doi:10.1016/j.jinteco.2016.04.003 · Cited by 304 · see citing works
“Our paper is related to the literature on economic geography including Krugman (1991a,b), Helpman (1998), Hanson (2005), Redding and Sturm (2008), Ramondo, Rodríguez-Clare, and Saborio (2012), Coşar and Fajgelbaum (2013), and Caliendo, Parro, Rossi-Hansberg, and Sarte (2014).”
Influential
- Authors
- Fujita, M., Krugman, P., & Venables, A. J.
- Venue
- The MIT Press eBooks
- Publisher
- The MIT Press
- Published
- 1999-06-11
- OpenAlex
- W2889260602
- Cited by
- 4,788
- References
- 0
- Citations by year
- 2026: 149 · 2025: 132 · 2024: 112 · 2023: 121 · 2022: 126 · 2021: 156 · 2020: 142 · 2019: 163 · 2018: 179 · 2017: 165 · 2016: 115 · 2015: 171 · 2014: 186 · 2013: 211 · 2012: 245
- FWCI
- 173.24
- Type
- book
- Language
- en
- Open access
- closed
- Locations
- The MIT Press eBooks (publishedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Regional Economics and Spatial Analysis
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Regional Economic and Spatial Analysis
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Keywords
- new economic geography, increasing returns, transportation costs, factor mobility, agglomeration economies, urban economics, regional economics, international trade, industrial organization, economic growth, spatial economics
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