Essay from the year 2003 in the subject Economics - Macro-economics, general, grade: 2, University of Kent (Department of Economics), course: Spatial Economy, 7 entries in the bibliography, language: English, abstract: Why people and firms are not evenly distributed around the world? Why do they not use land equally and why are firms and people are not equally spaced? Why are they concentrated in special areas although there is no geographical or structural difference? Reality shows a different picture to an equally distributed use of land and space: There is concentration of people and firms at special places or areas. The existence of cities is one of the questions that are interesting in an ex-post point of view as well as in future perspectives. The question is why cities exist and why are they different in size or in other words where do they locate and why as well as how do they develop. Therefore it makes sense to analyse the rationale for the existence of cities in terms of their determinants. There are dimensions that we should have a closer look at such as the localisation of cities, their growth and their different sizes. Firstly, different definitions of cities are mentioned. Afterwards the reasons for agglomeration forces through economies of scale that result in cities are described. Further its limits are analysed that bound the growth of cities. For explaining the different arrangement as well as the different sizes of cities the central place approaches of Christaller and Lösch are mentioned. Finally the empirical based rank-rule gives additional explanation for different sized cities.