The Rise and Fall of Cities under Declining Population and Diminishing Distance Frictions: The case of Japan

Many countries are expected to face rapidly declining and aging populations. Meanwhile, urbanization continues worldwide, preserving the power law for city size distribution at the country level. We have developed a spatial statistical model based on the theory of economic agglomeration to predict the future geographic distribution of the population at the 1 km grid level. The model considers growth factors for cities and grids, while maintaining the power law for city size distribution at the country level. Japan is an ideal case study of a shrinking economy. It highlights the challenges that the rest of Asia and the world are likely to face. Cities in aging regions will decline more rapidly, shifting the center of gravity of the country's population distribution. Smaller cities are more vulnerable to population decline, but with declining transportation and communication costs, even large cities are not immune to elimination. The future urban economy will revolve around fewer and more distant larger cities.