Creativity is a basic human trait that comes into play in a variety of contexts, including the production of art. It relates to the capacity of individuals to think inventively and imaginatively and to go beyond traditional ways of solving problems. In this chapter we consider various definitions of creativity and proceed to consider theories and models of creativity that endeavor to characterize both the creative individual and creative modes of thought. Next, we examine some of the ways in which creativity has been brought into economic analysis. We then turn to the central concern of the chapter, namely modeling the creative process in the arts. Our consideration of the issue leads us to propose an approach in which the creative choice by artists is viewed as an optimization decision with respect to `creative effort', given the artists' perceptions of what `the market' and what `the artworld' care about. In the penultimate section we discuss the relationship between creativity and talent in an empirical context, using recent data on artists' attitudes and behavior. The chapter ends with some conclusions and suggestions for further research.