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Regular version of the site

Article

Economic growth in a network under mutual dependence of agents

LUT Scientific and Expertise Publications. 2013. No. 13. P. 34-37.
Martemyanov Y., Matveenko V. D.

We consider a dependence of the growth rate on the elasticity of factor substitution in a framework of a model of mutual dependence of n agents. This model is interpreted as a network structure and can be used to analyze agglomerations. The  development is modeled as an increase in values of the agents in a dynamic system with CES functions. We investigate the cases of high and low complementarity of activities. In particular, we receive conditions allowing the identification of the cases when the elasticity of factor substitution has a positive effect on the growth rate under high complementarity of activities, and when the elasticity of factor substitution has a negative effect on the growth rate under low complementarity of activities.