Discussion paper

DP13638 New Economic Geography and the City

In this chapter, we provide a bird-eye overview of recent developments in NEG within a unifying framework. We build on the idea that the difference in the economic performance of regions depend on the global and local interactions between and within regions through the locational decisions made by firms and households at the macro and microspatial levels. We also focus on settings that take into account the urban structure, the social and skill composition and the sectorial specialization of regional agglomerations, and the quality of urban life. Three types of spatial frictions are considered, that is, transport costs, commuting costs, and communication costs.


Gaigné, C and J Thisse (2019), ‘DP13638 New Economic Geography and the City‘, CEPR Discussion Paper No. 13638. CEPR Press, Paris & London. https://cepr.org/publications/dp13638