The Geographic Space in International Trade: from Gravity to New Economic GeographyGianlucaCafisoauthorIn this paper we discuss the foundations of two recent trade theories linked by the role that the space-dimension plays in this kind of models. The theories discussed are the Gravity Approach and the New Economic Geography. We dedicate much to the explanation of the micro-foundations of the gravity equation and to the solution of the Border Puzzle achieved in a relevant and innovative paper by Anderson and van Wincoop. Some upto-date empirical applications, which test or use Gravity and NEG relations, are discussed in order to show how much these two theories are used in empirical trade analysis.F10 - General2007-09MPRA Paper