The 2008 Nobel prize for economics was awarded to Paul Krugman for three papers - Krugman (1979, 1980, 1991). In this paper we illustrate that, indeed, these three papers are closely connected. We present - a summary of - the papers using a unified framework. Central in the discussion is the...

"The agglomeration force behind the New Economic Geography literature initiated by Krugman is based on the notion that larger markets should have a lower variety adjusted price index. Despite his Nobel Prize, there have been no tests of this idea. This paper represents the first such test. Using...