Population Decline and Regional Disappearance: Policy Prescriptions for Managing Smart Shrinkage
- Story 3. The mechanism governing the size and spatial distribution of cities -

This study presents a microeconomic framework explaining the formation, size variation, and spatial arrangement of cities. Differences in firm market areas across industries and the tendency of firms to co-locate to gain mutual benefit from a shared consumer base generate a nested core-periphery structure, where cities of varying size and industrial diversity encompass one another. This approach allows for analysis of how changes in population and other fundamental economic conditions affect regional structure.