Geography and Trade

"I have spent my whole professional life as an international economist thinking and writing about economic geography, without being aware of it," begins Krugman in the readable and anecdotal style that has become a hallmark of his writings. Krugman observes that his own shortcomings in ignoring economic geography, or regional agglomeration, have been shared by many professional economists, primarily because of the lack of explanatory models. In Geography and Trade he provides a stimulating synthesis of ideas in the literature and describes new models for implementing a study of economic geography that could change the nature of the field.

Krugman loosely defines economic geography as the study of economic issues in which location matters. Economic theory usually assumes away distance. Krugman argues that it is time to put it back - that the location of production in space is a key issue both within and between nations.