Agglomeration and Population Aging in a Two Region Model of Exogenous Growth

  • Theresa Grafeneder-Weissteiner (Ko-Autor*in)
  • Klaus Prettner (Ko-Autor*in)

Aktivität: VortragWissenschaftlicher Vortrag (Science-to-Science)


This article investigates the effects of introducing demography into the New Economic Geography. We generalize the constructed capital approach, which relies on infinite planning horizons, by introducing mortality. The resulting overlapping generation framework allows us to study the effects of aging on agglomeration. Interestingly, the level of trade costs triggering catastrophic agglomeration is rather sensitive to changes in mortality. In particular, the introduction of a positive mortality rate makes the symmetric equilibrium more stable and therefore counteracts agglomeration. In sharp contrast to other New Economic Geography approaches, this implies that deeper integration is not necessarily associated with higher interregional inequality.
Zeitraum22 Mai 200923 Mai 2009
EreignistitelAnnual Meeting of the Austrian Economic Association
VeranstaltungstypKeine Angaben