The New Economic Geography

The New Economic Geography (NEG) is a field in economics that studies how economic activities are distributed across different locations. It examines why certain areas become hubs of industry and commerce while others remain less developed. Key factors include transportation costs, economies of scale, and the benefits of being close to other businesses and customers. NEG helps explain urbanization, regional disparities, and how policies can influence growth, highlighting the importance of geography in economic outcomes. Essentially, it connects spatial considerations with economic decisions, showing how location affects economic development and competitiveness.