2010/01/01 by Theresa Grafeneder-Weissteiner, Grafeneder-Weissteiner, Theresa
Economics, Econometrics and Finance · #Economic Growth and Productivity #Fiscal Policy and Economic Growth #Regional Economics and Spatial Analysis
paper · pdf · doi:10.57938/1c891587-902a-4b98-8662-9c4923bd28d9
openalex publication_date 2010/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/23
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)