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.
We consider the dependence of the growth arte on the elasticity of substitution within the framework of a model with the agents' mutual dependence. This model is interpreted as a network structure. the development is explined as the agents' valus increase in a dynamic system described by functions which display constant elasticity of substitution (CES). We investigate the cases of high and low complementarity of activities. In particular, we receive conditions allowing to identify the cases when the elasticity of substitution has the positive (negative) effect on growth rate under high (low) complementarity of activities. Additionally we analyse the influence of the individual agent's productivities on the growth rate. Finally we give a potential generalisation of the model allowing for different growth rates of the agents.