Krugman, Paul (1991) Geography and trade, London: MIT Press/Leuven UP, p.142.
Economic geography is devoted to understand the location of production in space, in other words where things happen in relation to one another (p.1). Economists ought to remember that countries both occupy and exist in space (p.2). “To say anything useful or interesting about the location of economic activity in space, it is necessary to get away from the constant-returns, perfect-competition approach that still dominates most economy analysis”, and use such notions as increasing returns and imperfect competition (p.4). Read the rest of this entry »