This chapter surveys the theoretical and empirical literature on the relationship between the spatial distribution of economic activity and transportation costs. We develop a multiregion model of economic geography that we use to understand the general equilibrium implications of transportation...

The informationally simple approach to incentive regulation applies mechanisms that translate the regulator’s objective function into the firm’s profit-maximizing objective. These mechanisms come in two forms, one based on subsidies/taxes,the other based on constraints/ price caps. In spite...