Demographic change, growth and agglomeration

Grafeneder-Weissteiner, Theresa (2010) Demographic change, growth and agglomeration. Department of Economics Working Paper Series, 132. Department of Economics, WU Vienna University of Economics and Business, Vienna.


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This article presents a framework within which the effects of demographic change on both agglomeration and growth of economic activities can be analyzed. I introduce an overlapping generation structure into a New Economic Geography model with endogenous growth due to learning spillovers and focus on the effects of demographic structures on long-run equilibrium outcomes and stability properties. First, life-time uncertainty is shown to decrease long-run economic growth perspectives. In doing so, it also mitigates the pro-growth effects of agglomeration resulting from the localized nature of learning externalities. Second, the turnover of generations acts as a dispersion force whose anti-agglomerative effects are, however, dampened by the growth-linked circular causality being present as long as interregional knowledge spillovers are not perfect. Finally, lifetime uncertainty also reduces the possibility that agglomeration is the result of a self-fulfilling prophecy. (author's abstract)

Item Type: Paper
Keywords: agglomeration / endogenous growth / demographic change / knowledge spillovers / Bevölkerungsentwicklung / Agglomeration <Wirtschaft> / endogenes Wirtschaftswachstum
Classification Codes: JEL F43, O33, J10, R11
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 11 Jun 2010 10:18
Last Modified: 22 Oct 2019 00:41


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