This set of three papers addresses the broad question of what the New Economy (NE) has to offer the community economic development (CED) approach to economic development by first developing some microeconomic foundations for both the areas of community economic development and the New Economy. The first paper focuses on developing microeconomic underpinnings to explain how CED works. With the use of matrix algebra and cost-benefit analysis formalized microeconomic models are developed to explain and justify the role of subsidies in CED; to present an economic framework for analysing the fiscal impact of CED; to develop an economic model to explain collective action for CED. The second paper presents a theoretical model explaining the clustering behaviour of firms in the New Economy (NE). The model incorporates knowledge creation in clusters as a location specific comparative advantage with negative location specific external economies of scale due to congestion into Krugmans (1991) core-periphery model. Simulation results suggest that clustering is more prevalent in the New Economy. The third paper addresses the broad question of what the NE has to offer CED by assessing the appropriateness of NE activities for CED initiatives, based on the models developed in the first two papers. Analysis reveals that NE clusters are not generally deemed appropriate for CED leading to the consideration of the applicability of the forty acres and a modem concept for CED. With use of the NE model, developed in the second paper, it is shown that firms in certain industries, such as back-office services industries, benefit from locating away from clusters and thus may provide opportunities for CED initiatives in the NE.