Does population increase in cities help or harm their economy?
In: Economics
as a town grows there is a need for more housing (labor and materials, sales and marketing) and more people means more food and clothes, they have to move around, they want to be entertained. they consult with tax/finance advisors, they need medical treatment.
A town loosing population has financial difficulties of losing supply jobs, certainly few construction jobs, Detroit had to bulldoze whole neighborhoods as they became havens for drug/crime, expenses kept increasing while revenue fell.
I think the general theory is that an increase in population helps cities, by over time providing new source of taxes and jobs and consumerism. All of which affect the market. However this becomes dicey when it is a rapid influx of population and not a gradual steady increase, because it stresses the system of supply and demand. You could see this example for the housing market, where there aren’t enough apartments, and the demand raises prices, to where it starts becoming a problem for people trying to get a home. Including bigger demands on infrastructure like roads. And congested traffic.
Short story, it’s good, but only if the city can keep up, or limit the change so they are not overwhelmed by a system out of balance.
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