Year of Graduation
Theoretical Aspects of Industry Agglomeration
Applied Economics and Mathematical Methods
We develop a monopolistically competitive model of the open economy with agglomeration effects. We study the influence of (co)agglomeration on the equilibrium in the economy, and determine agglomertion effect on wages in the industry and the survival rate of firms in the context of the cut-off point of firms' productivity in equal and asymmetric cities. Numerically we prove positive effect of agglomeration on the economy. Thus, the paper, firstly, gives an idea of agglomeration effects as a tool to influence the survival rate of firms, and secondly, allows us to make a more in-depth analysis of the model of monopolistic competition with agglomeration effects.