Agglomeration and population ageing in a two region model of exogenous growth

This article investigates the effects of introducing demography into the New Economic Geography. We generalize the constructed capital approach, which relies on infinite individual planning horizons, by introducing mortality. The resulting overlapping generation framework with heterogeneous individuals allows us to study the effects of ageing on agglomeration processes by analytically identifying the level of trade costs that triggers catastrophic agglomeration. Interestingly, this threshold value 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 tendencies. In sharp contrast to other New Economic Geography approaches, this implies that deeper integration is not necessarily associated with higher interregional inequality.Agglomeration, New Economic Geography, Trade and Growth, Constructed Capital Model, Population Ageing.

Essays on agglomeration and demographic change

Wie beeinflussen demografische Strukturen Agglomerationsprozesse? Die drei Artikel dieser Dissertation widmen sich der Beantwortung dieser Frage, indem sie die Auswirkungen von demografischem Wandel sowohl auf die räumliche Verteilung von ökonomischer Aktivität als auch auf den Zusammenhang von Wachstum und Agglomeration untersuchen. Der erste Aufsatz entwickelt ein neuartiges theoretisches Basismodell, das einen New Economic Geography Ansatz um überlappende Generationen erweitert. Dies ermöglicht es, den grundlegenden Zusammenhang zwischen demografischen Strukturen und Agglomeration zu analysieren. Durch die Berücksichtigung von Lebenszyklen, im Besonderen durch die Verteilungseffekte infolge des Generationenwechsels, werden Agglomerationsprozesse deutlich abgeschwächt. Für plausible demografische Strukturen findet Agglomeration somit auch bei zunehmender ökonomischer Integration nicht statt. Der zweite Artikel erweitert das Basismodell um eine detaillierte Modellierung von demografischen Wandel, indem er unterschiedliche Geburten- und Sterberaten und somit variierende Bevölkerungsgrößen zulässt. Dadurch können sowohl die Auswirkungen von Änderungen in der Altersstruktur als auch in der Bevölkerungswachstumsrate analysiert werden. Während Bevölkerungsalterung Agglomerationstendenzen verstärkt, erweist sich Bevölkerungswachstum als Dispersionskraft. Erweitert man, wie im dritten Artikel, das Modell schließlich um endogenes Wachstum aufgrund von Lerneffekten, kann auch die Rolle von demografischen Strukturen für den Zusammenhang zwischen Wachstum und räumlicher Verteilung von ökonomischer Aktivität analysiert werden. Generell senkt die Berücksichtigung von begrenzter Lebensdauer die langfristigen Wachstumsraten. Gleichzeitig wird dadurch der wachstumsfördernde Effekt von Agglomeration infolge von räumlich begrenzten Lerneffekten abgeschwächt.How do demographic structures impact upon agglomeration processes? The three articles comprising this thesis are dedicated toward answering this question by focusing on the effects of demographic change on both the spatial distribution of economic activity and the linkage between growth and agglomeration. The first essay develops a novel theoretical baseline framework that merges the two research strands of New Economic Geography and overlapping generation models. This allows to establish and analyze the main linkage between demography and agglomeration processes. We find that the introduction of an overlapping generation structure considerably reduces agglomeration tendencies due to the distributional effects from the turnover of generations. For plausible demographic structures, agglomeration processes thus do not set in even if economic integration is promoted up to a high degree. The second article extends the above benchmark model with a view to focusing on the effects of changes in both the population age structure and in the population growth rate on agglomeration processes. To do so, it incorporates a more detailed analysis of demographic change by allowing for unequal birth and death rates and thus varying population size. While population aging strengthens agglomeration tendencies, population growth acts as a dispersion force. Finally, the third essay additionally allows for endogenous growth due to learning spillovers in order to also investigate the impact of demography on the linkage between growth and the spatial distribution of economic activity. Lifetime uncertainty is shown to decrease long-run growth perspectives. In doing so, it mitigates the pro-growth effects of agglomeration resulting from the localized nature of learning spillovers

Three pillars of urbanization : migration, aging, and growth

Economic development in industrialized countries is characterized by rising per capita GDP, increasing life expectancy, and an ever larger share of the population living in cities. We explain this pattern within a regional innovation-driven economic growth model with labor mobility and a demographic structure of overlapping generations. The model shows that there is a natural tendency for core-periphery structures to emerge in modern knowledge-based economies

Demographic change, growth and agglomeration

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)Series: Department of Economics Working Paper Serie

Agglomeration and population aging in a two region model of exogenous growth

This article investigates the effects of introducing demography into the New Economic Geography. We generalize the constructed capital approach, which relies on infinite individual planning horizons, by introducing mortality. The resulting overlapping generation framework with heterogeneous individuals allows us to study the effects of aging on agglomeration processes by analytically identifying the level of trade costs that triggers catastrophic agglomeration. Interestingly, this threshold value 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 tendencies. In sharp contrast to other New Economic Geography approaches, this implies that deeper integration is not necessarily associated with higher interregional inequality.Series: Department of Economics Working Paper Serie

Agglomeration processes in aging societies

This article investigates agglomeration processes in aging societies by introducing an overlapping generation structure into a New Economic Geography model. Whether higher economic integration leads to spatial concentration of economic activity crucially hinges on the economies' demographic properties. While population aging as represented by declining birth rates strengthens agglomeration processes, declining mortality rates weaken them. This is due to the fact that we allow for nonconstant population size. In particular, we show that population growth acts as an important dispersion force that augments the distributional effects on agglomeration processes resulting from the turnover of generations. (author's abstract)Series: Department of Economics Working Paper Serie

Demographic change, growth and agglomeration

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.

Agglomeration processes in aging societies

This article investigates agglomeration processes in aging societies by introducing an overlapping generation structure into a New Economic Geography model. Whether higher economic integration leads to spatial concentration of economic activity crucially hinges on the economies' demographic properties. While population aging as represented by declining birth rates strengthens agglomeration processes, declining mortality rates weaken them. This is due to the fact that we allow for nonconstant population size. In particular, we show that population growth acts as an important dispersion force that augments the distributional effects on agglomeration processes resulting from the turnover of generations.

Agglomeration and population aging in a two region model of exogenous growth

This article investigates the effects of introducing demography into the New Economic Geography. We generalize the constructed capital approach, which relies on infinite individual planning horizons, by introducing mortality. The resulting overlapping generation framework with heterogeneous individuals allows us to study the effects of aging on agglomeration processes by analytically identifying the level of trade costs that triggers catastrophic agglomeration. Interestingly, this threshold value 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 tendencies. In sharp contrast to other New Economic Geography approaches, this implies that deeper integration is not necessarily associated with higher interregional inequality.

Das ARA System: Volkswirtschaftliche Bewertung und Zukunftsperspektiven - Endbericht ; Studie im Auftrag der ARA AG und ARGEV GmbH

aus dem Inhaltsverzeichnis: Executive Summary; Einleitung; Studieninhalt; Das europäische und österreichische Abfallwirtschaftsrecht; Volkswirtschaftliche Konsequenzen aus den abfallrechtlichen Rahmenbedingungen; Österreichische Sammel- und Verwertungssysteme; Abfall- und Verpackungsabfallaufkommen in Österreich; Modelle der Organisation der Abfallentsorgung; Der österreichischen Markt für Dienstleistungen von Sammel- und Verwertungssystemen; Mikroökonomische Marktmodelle; Das ARA System und andere Arten von SVS im Vergleich; Ökonometrische Untersuchungen; Ökologische Effizienz der Organisation der Verpackungsabfallentsorgung; Anhang A - Studien zur ökologischen Effizienz; Anhang B - Länderberichte; Quellen