Trade costs are crucial in new economic geography (NEG) models. The unavailability of actual trade costs data requires the approximation of trade costs. Most NEG studies do not deal with the ramifications of the particular trade costs specification used. This paper shows that the specification...

In this paper we want to shed some light on the empirical relevance of the new economic geography. Using one of the central features of the core new economic geography models, namely that wages have the tendency to fall the further one moves away from centres of economic activity, we investigate...

"The purpose of our book is to offer an introduction to urban and geographical economics, the two dominant approaches in mainstream economics to explain the distribution of economic activity across space. The fact that we offer an 'introduction' does not mean that we avoid models or shy away...