Population Decline and Regional Disappearance: Policy Prescriptions for Managing Smart Shrinkage
- Story 5. A predictive model for the rise and fall of cities -

This study describes the design of a reduced-form statistical model for predicting the future rise and fall of Japanese cities. The model is grounded in the economic agglomeration theory discussed in Stories 3 and 4, together with the power law observed in city-size distributions. The estimation draws on three processes that the Japanese economy experienced between 1970 and 2020 while broadly maintaining the power law in city-size distributions: the advance of urbanization and concentration toward Tokyo, the evolution of individual cities' deviations from the power law, and changes in population distribution within cities. The model then takes the national population projections by the National Institute of Population and Social Security Research as exogenous inputs to forecast the spatial distribution of population across Japan at the 1 km mesh level from 2025 to 2200.