ABSTRACT
In this chapter, the authors evaluate resilience of selected counties to the shock of shrinking population and economies. The economic effects of shrinking, measured in terms of per capita income, can be ameliorated through more compact development patterns. Metropolitan areas tend to grow faster and generate more wealth when they can take advantage of agglomeration economies in which economic development is enhanced by a clustering of economic activity. Innovation is needed to sustain Cover time. Using econometric analysis, they go on to find that higher metropolitan-level density increases per capita income, holding other factors constant. Nelson argues that most agglomeration economy gains are made when suburban areas become more densely settled in both jobs and people. They conclude that if federal, state, regional, and local policy makers wish to improve the economies of shrinking counties, they should pursue policies leading to more, not less, compact development patterns.
