Foreword xiii

Acknowledgments xxiv

I Facts and Theories 1

1 Spatial Inequalities: A Brief Historical Overview 3

1.1 The Space-Economy and the Industrial Revolution 4

1.2 Regional Disparities: When an Ancient Phenomenon

Becomes Measurable 12

1.3 Concluding Remarks 25

2 Space in Economic Thought 26

2.1 Economics and Geography: A Puzzling History of

Reciprocal Ignorance 27

2.2 Integrating Space in Economics: The Main Attempts 30

2.3 The Burden of Modeling Constraints 31

2.4 The Breakdown of the Competitive Paradigm in a

Spatial Economy 35

2.5 What Are the Alternative Modeling Strategies? 41

2.6 Increasing Returns and Transport Costs:

The Basic Trade-Off of Economic Geography 43

2.7 Concluding Remarks 48

II Space, Trade, and Agglomeration 51

3 Monopolistic Competition 53

3.1 The Dixit–Stiglitz Approach 55

3.2 Monopolistic Competition: A Linear Setting 71

3.3 Concluding Remarks 79

3.4 Related Literature 80

4 Interregional Trade and Market Size 81

4.1 The Dixit–Stiglitz–Krugman Model of Trade 82

4.3 Concluding Remarks 98

4.4 Related Literature 100

5 Gravity and Trade Costs 101

5.1 The Gravity Model 103

5.2 Trade Costs 115

5.3 Concluding Remarks 127

5.4 Related Literature 127

6 The Core–Periphery Structure 130

6.1 Increasing Returns and Industrialization 133

6.2 Regional Disparities: The Krugman Model 137

6.3 The Krugman Model Revisited 160

6.4 Concluding Remarks 162