Quotation Grafeneder-Weissteiner, Theresa, Prettner, Klaus. 2009. Agglomeration and Population Aging in a Two Region Model of Exogenous Growth. Annual Meeting of the Austrian Economic Association, Linz, Österreich, 22.05-23.05.




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.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title Agglomeration and Population Aging in a Two Region Model of Exogenous Growth
Event Annual Meeting of the Austrian Economic Association
Year 2009
Date 22.05-23.05
Country Austria
Location Linz
URL http://www.econ.jku.at/1446/


Agglomeration processes in ageing societies
Grafeneder-Weissteiner, Theresa (Former researcher)
Prettner, Klaus
Department of Economics (Kubin) (Details)
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