In this chapter titled “Geography Lost and Found,” Paul Krugman takes a swipe at past economist for having ignored the subject of economic geography – or having approached it in a way that is not devoid of prejudices and preconceived notions. The author notes that just like the way geologists and geographers ignored some glaring realities about the shape of continents simply because they could not explain it, economists had done the same were equally guilty of the same sin, because of not highlighting the concept of ‘spatial economics’ (Krugman, 1995). The author is categorical that location matters a great deal in economic, because of issues like transportation costs and proximity to raw materials. Krugman reminds that the real world is not a homogenous plain of land, with all places being equal in terms capability to be productive. Therefore, this difference in the capacity to be productive needed to recognized in economics of countries, just like geographical maps showed the clear difference between countries.
The author goes to great lengths to illustrate his points, noting that both transportation and economies of scale made it necessary to appreciate the need to give location a more important look in analysis of economic issues. After delving in statistical issues – complete with derivation of modes and mention of both correlation and regression issues, the author renews his attack on past economists for ignoring the issues of special distribution and by extension economic geography. The author remains cautious not to lose his scholarly tone, often referring to other scholars who have contributed greatly – through acts of commission and omission – to the subject of special economics. The author ends by making a call for adoption of modeling effects that take in to account the reality of location so as to broaden the scope of economics and make it appreciative of spatial issues.