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 second essay studies the relation between wages and the distribution of skills in American cities, and finds that not only the average level of skills matters but also their distribution. The third essay looks at the different choice of FDI mode of entry across foreign investors into U.S. manufacturing. The book should be useful to academics interested in the geographical implications of the phenomena of trade liberalization, the multinationality of the firm and the new ways of organizing production, as well as to policy makers working on the design of regional and industrial policies.