When firms and people are located near each other in cities and in industrial clusters, they benefit in various ways, including by reducing the costs of exchanging goods and ideas. One might assume that these benefits would become less important as transportation and communication costs fall. Paradoxically, however, cities have become increasingly important, and even within cities industrial clusters remain vital.

Agglomeration Economics brings together a group of essays that examine the reasons why economic activity continues to cluster together despite the falling costs of moving goods and transmitting information. The studies cover a wide range of topics and approach the economics of agglomeration from different angles. Together they advance our understanding of agglomeration and its implications for a globalized world.

Edward L. Glaeser is the Fred and Eleanor Glimp Professor of Economics at Harvard University, where he also serves as director of the Taubman Center for State and Local Government and director of the Rappaport Institute for Greater Boston. He is a research associate and director of the Urban Economics working group at the NBER.