Why are some spatial differences in land rents and wages not bid away by firms and individuals in search of low-cost or high-income locations? Why does economic activity cluster in centers of activity? And what are the consequences of remoteness from existing centers?

The most striking fact about the economic geography of the world is the uneven spatial distribution of economic activity, including the coexistence of economic development and underdevelopment. High-income regions are almost entirely concentrated in a few temperate zones, half of the world's GDP...