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The local aspect of aging is often ignored. However, municipalities, in particular cities will be affected by the consequences of population aging, in particular a decrease in tax revenues and an increase of expenditures on public goods demanded by the elderly. In this paper we use a static general equilibrium model to analyse the impact of aging on city’s finances. We show that an increase in the number of pensioners will raise the cost of public goods. However, an increase in the number of working elderly can alleviate the situation.
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