We present a selective survey of the main results obtained in spatial econo
mic theory. Our focus is on firm location. We start with the simplest locat
ion problem and proceed to recent models of industrial location in general
equilibrium. The middle section is a review of what has been accomplished i
n the literature on spatial pricing and spatial competition. We conclude wi
th a discussion of recent models of economic geography which explain the un
even spatial distribution of economic activity. (C) 1999 Elsevier Science L
td. All rights reserved.