Table of Contents

Handbook on the History of Economic Analysis Volume III

Handbook on the History of Economic Analysis Volume III

Developments in Major Fields of Economics

Edited by Gilbert Faccarello and Heinz D. Kurz

Volume III contains entries on the development of major fields in economics from the inception of systematic analysis until modern times. The reader is provided with succinct summary accounts of the main problems, the methods used to address them and the results obtained across time. The emphasis is on both the continuity and the major changes that have occurred in the economic analysis of problematic issues such as economic growth, income distribution, employment, inflation, business cycles and financial instability. Each Handbook can be read individually and acts as a self-contained volume in its own right. It can be purchased separately or as part of a three-volume set.

Chapter 11: Economic geography

Jacques-François Thisse

Subjects: economics and finance, history of economic thought


Ever since the emergence of civilization, human activities and standards of living have been unevenly distributed among both the continents and their territories. Economic life is concentrated in a fairly limited number of human settlements (cities and clusters), which are gathered under the heading of “economic agglomerations”. Furthermore, there are large and small agglomerations with very different combinations of firms and households. Economic geography – or geographical economics – aims to explain why economic activities choose to establish themselves in some particular places, with the result that some places fare better than others. The purpose of this chapter is to provide a bird’s-eye overview of the main contributions made by economists and regional scientists in understanding how the spaceeconomy is organized. There is a wide agreement that the space-economy may be viewed as the outcome of a trade-off between different types of scale economies in production and the mobility costs of goods, people and information. Although it has been rediscovered many times (including in recent periods), this trade-off is at the heart of economic geography ever since the work of Lösch (1940). It implies that the location of economic activities is the result of a complicated balance of forces that push and pull consumers and firms in opposing directions.

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