Compact City versus Garden City : Urban-Regional Analysis for Dwindling and Aging Society

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While Japan is faced with rapid decline in population and increase of energy costs, we analyze those effects on the population distribution over urban area or regions. It is found that agglomeration could be occurred by the higher transport cost, yet population declines tend to bring dispersion of population. If agglomeration happens, the social welfare depends on the scale of the area. Therefore, too much compactness of cities deteriorates the welfare in equilibrium.