Thünen and the New Economic Geography

In this paper, I explain Thünen's pioneering work on industrial agglomeration. In my opinion, Thünen's thinking on industrial agglomeration was not only amazingly advanced for his time, but in many respects remains novel even today. It is shown that if we unify Thünen's well-known theory on agricultural land use with this pioneering work on industrial agglomeration by using modern tools, then we essentially come up with a prototype of New Economic Geography model.

► Explain Thunen's pioneering work on industrial agglomeration.
► Show that it remains novel even today.
► It essentially represents a prototype of New Economic Geography model.