Geography and Trade

By Paul Krugman

Book Overview

"I have spent my whole professional life as an international economist thinking and writing about economic geography, without being aware of it," begins Paul Krugman in the readable and anecdotal style that has become a hallmark of his writings. Krugman observes that his own shortcomings in ignoring economic geography have been shared by many professional economists, primarily because of the lack of explanatory models. In Geography and Trade he provides a stimulating synthesis of ideas in the literature and describes new models for implementing a study of economic geography that could change the nature of the field. Economic theory usually assumes away distance. Krugman argues that it is time to put it back - that the location of production in space is a key issue both within and between nations.

• Format: Paperback
• Language: English
• ISBN: 0262610868
• ISBN13: 9780262610865
• Release Date: November 1992
• Publisher: MIT Press
• Length: 156 Pages
• Weight: 0.48 lbs.
• Dimensions: 0.5" x 5.4" x 8.0"
• Age Range: 18 years and up
• Grade Range: Postsecondary and higher

Customer Reviews

Elegant and readable introduction, combining history and economics

Krugman's book is readable and thought-provoking. As other reviewers have noted, it's not all brand new or groundbreaking (which makes sense given that it was a series of lectures). But this is not a shortcoming for the non-expert reader, nor really for economists who have paid too little attention to amazing patterns and idiosyncrasies of agglomeration. For me, the highlight of the book is Krugman's recognition of the historical indeterminacy of agglomeration. Agglomeration dictates the general patterns of development, but historical coincidences change the specific place and time of actual development. Full of both abstract models and concrete examples, this is useful and entertaining book!

A step forward in explaining international trade

This book presents economies of scale in manufacturing as an explanation underlying international trade. The theory is quite good albeit simple. Also presented is a empirical study showing how industry concentration and trade are related. For its short length quite good. More in-depth work, especially empirical, needs to be made along the lines implied by this book. Definitely a step forward in international trade theory.

Geography and regional trade

Krugman's small book contains a lot of insights regarding geography and regional trade. The use of simple models to increase our understanding of ideas that some might refer to as "common sense" is actually the strength of the book (not a drawback at all). The ideas are less applicable to international trade since factors of production are assumed perfectly mobile. The book does, however, provide a framework for thinking about trade between countries that differ from traditional international trade theory. I highly recommend the book.

Geography with models

In this little and clearly written book Prof. Krugman asks two important questions, which are in the centre of geography for a long time. These two questions are: why is production spatially concentrated ? and why are particular industries often highly localized ? starting with the empirical example of the manufacturing belt in the U.S. Prof. Krugman developes a simple model which shows that the interaction of increasing returns, transportation costs and demand can result into the spatial concentration of the whole manufacturing sector. The causes of industrial localization, Prof. Krugman argues, are external economies like labor market pooling, pecuniary externalities through intermediate inputs and technological spillovers between firms. Again, Prof. Krugman uses some simple models to get to his point. Some may argue that the results of these simple models are obvious. This is right but with his models Prof. Krugman gives the geographic community a much more powerful ! tool of analysis as just story-telling or statistical explorations.