Our objective is twofold. First, we show why there is a spatial question in economic theory - why a free competitive market is unable to cope with agglomeration and regional imbalance in the absence of market distortions. Second, using a new and simple model, we review what has been accomplished...

Since its very appearance, probably due to its provocative name, New Economic Geography has stirred a debate on whether it is economic geography proper or rather geographical economics. In both cases, its real novelty has been questioned. We focus on this last issue. In particular, we argue that...