The authors show how a common approach that emphasizes the three-way interaction among increasing returns, transportation costs, and the movement of productive factors can be applied to a wide range of issues in urban, regional, and international economics. Since 1990 there has been a renaissance of theoretical and empirical work on the spatial aspects of the economy--that is, where economic activity occurs and why. Using new tools--in particular, modeling techniques developed to analyze industrial organization, international trade, and economic growth--this "new economic geography" has emerged as one of the most exciting areas of contemporary economics. The authors show how seemingly disparate models reflect a few basic themes, and in so doing they develop a common "grammar" for discussing a variety of issues. They show how a common approach that emphasizes the three-way interaction among increasing returns, transportation costs, and the movement of productive factors can be applied to a wide range of issues in urban, regional, and international economics. This book is the first to provide a sound and unified explanation of the existence of large economic agglomerations at various spatial scales.;Preface; 1 -- Introduction ; I -- Some Intellectual Background; 2 -- Antecedents I: Urban Economics; 3 -- Antecedents II: Regional Science ; II -- Labor Mobility and Regional Development ; 4 -- The Dixit-Stiglitz Model of Monopolistic Competition and Its Spatial Implications ; 5 -- Core and Periphery ; 6 -- Many Regions and Continuous Space ; 7 -- Agricultural Transport Costs ; III -- The Urban System ; 8 -- Spatial Models of Urban Systems: A Heuristic Introduction ; 9 -- The Monocentric Economy ; 10 -- The Emergence of New Cities ; 11 -- Evolution of a Hierarchical Urban System.