The concentration of economic activity and, in particular, the concentration of population emerges as a relevant feature of this century. Today, in most developed countries, two out of every three people live in cities, many of which have populations of over half a million people. What makes concentration so high? Why is the population not evenly spread out the national landscape? Space was already a concern of economists in the 1930's and 1940's, but it was only two decades ago that this topic received a stricter formalization, with explicit microfoundations. In particular, the serious problems associated with large cities (urban traffic congestion, pollution, crime, etc.) have made their study an important topic and, therefore, have triggered the birth of a new area, namely Urban Economics. In this paper, we present an overview of the principal urban models, focusing on the most recent lines of research.

Keywords: concentration, cities, externalities, location.
JEL classification: H54, R12, R14, R52.