This book offers an introduction to an important new field in economics, entitled Geographical Economics, which sets out to explain the distribution of economic activity across space. In doing so, it tries to bring together and apply insights from various fields of economics. The book will therefore be of interest to students and scholars of international economics and business, as well as of economic geography, regional economics, and urban economics. The fact that we offer an “introduction” does not mean that we avoid models or shy away from difficult concepts. It indicates that we have made an effort to write a book that is accessible to readers and students who are new to the field of geographical economics.

Although we introduce and discuss various modeling approaches, we keep the required technicalities to a minimum. Whenever possible we draw attention to important concepts and applications in special interest boxes, making ample use of examples and diagrams to explain the workings of the models. Chapter 3, which explains the structure of the core model of geographical economics, gives background derivations in six technical notes. Throughout the book the level of mathematical competence required does not rise above simple optimization techniques that should be familiar to upper-level undergraduate and graduate students, both in economics and in other fields of social science. The target audience of our book is not limited to these students, but includes professionals working at government agencies, banks, international organizations, and private research firms, as well as students and scholars of international business and economic geography.