LORRIE MOORE IS ALIVE. She is quick to point this out in the author's note with which this handsome, “posthumous-looking” collection of her short fiction begins. To some British readers the announcement of her continuing life may represent their first inkling that she exists at all. In an ideal world - the kind of world, it must be said, entirely absent from Moore's fiction - she would be outselling Katie Price 100-1.

The Collected Stories are arranged, at Moore's behest, in reverse order, beginning with three relatively recent stories from The New Yorker and concluding with Moore's 1985 debut collection, Self-Help. “The better ones are up front,” she notes with typical self-effacement.

It has been ten years since the publication of Moore's last and best-known collection, Birds of America, but the previously uncollected trio of stories that opens the present volume confirms that her powers remain constant. Moore's stories alternate between the hilarious and the devastatingly sad, except when they contrive to be both at once. They also tend to be preoccupied with the uncrossable distances between people - lovers, husbands and wives, parents and children - that they nevertheless spend most of their lives trying to cross anyway.

The couple in Paper Losses, the most recent story here, have been attempting just that with diminishing success for quite some time: “Although Kit and Rafe had met in the peace movement...now they wanted to kill each other.”

This personal distance is echoed by geography as her stories, to speak of them in order of composition, take wing from the crowded, cacophonous isolation of New York and settle in the vast, vacant Midwest. Ira, a divorced man courting a deranged paediatrician who enjoys an uncomfortably physical relationship with her teenage son, feels, as bombs flatten Baghdad, that he is “watching history from the dimmest of backwaters - a land of beer and golf, the horizon peacefully fish-gray”.

Elsewhere, Agnes has “grown annoyed with Iowa, the pathetic third-hand manner in which the large issues and conversations of the world were encountered, the oblique and tired way history situated itself there - if ever. She longed to be a citizen of the globe!”

There are larger points being made here about America's foreign policy. Mentions of wars and incursions, from Nagasaki and Vietnam, and on to more recent actions in the Gulf, crop up frequently. Such international concerns unfurl naturally from Moore's more localised settings of malls, offices and apartments, and do not disturb the assertion that her fiction makes again and again that the personal, to paraphrase the old feminist standard, is itself innately political.

These stories map words themselves. They prove treacherous, as shown by the frequency with which characters mishear and misspeak or engage in wordplay with a significance beyond its seeming inanity. Physical as well as emotional decline is a theme returned to with obsessive regularity. Lumps appear, tests are run, indignities suffered, people die.

Reading this treasury of Moore's short stories is to realise that having the agonies, tragedies and brief, dazzling joys of life explored with such wisdom is something rare, and not to be spurned. To then have that wisdom burnished by wit redolent of Woody Allen at his best should have us dancing on the tables.

The Collected Stories of Lorrie Moore
Faber, £20; 672pp
Buy the book

Times Recommends

• The 100 Best Books of the Decade
• The Times picks the 50 best paperbacks of 2009
• The conversation: James Ellroy