Spatial economics gained importance in the 1990s when the "new economic geography" brought traditional questions from the urban/regional literature into mainstream economics. This book develops and empirically tests models to better understand the determinants of economic activity at three different geographical levels: urban, regional and national. The first essay examines the ability of public policies to alter the market outcome of economic agglomeration, and assesses the effects on employment of the Structural Funds, the main instrument of the European regional policy, during 1994-99. The...