Of Hype and Hyperbolas: Introducing the New Economic Geography
- 1 June 2001
- journal article
- Published by American Economic Association in Journal of Economic Literature
- Vol. 39 (2) , 536-561
- https://doi.org/10.1257/jel.39.2.536
Abstract
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."Keywords
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