@article{ClemensHeinemann2015,
  author    = {Clemens, Christiane and Heinemann, Maik},
  title     = {Endogenous growth and wealth inequality under incomplete markets and idiosyncratic risk},
  series = {Journal of macroeconomics},
  volume    = {45},
  journal   = {Journal of macroeconomics},
  publisher = {Elsevier},
  address   = {Amsterdam},
  issn      = {0164-0704},
  doi       = {10.1016/j.jmacro.2015.05.008},
  pages     = {300 -- 317},
  year      = {2015},
  abstract  = {This paper describes the equilibrium properties and dynamics of a model which combines the key features of the standard incomplete market model (Aiyagari, 1994) with a standard endogenous growth mechanism to gain a deeper understanding of the feedback effects between growth and wealth inequality in the presence of credit frictions and idiosyncratic risk. We characterize growth equilibria and find that a balanced growth path not necessarily exists if households are subject to ad hoc borrowing constraints. Growth, inequality, and risk are positively related in our model, but we also identify a hump-shaped relationship between welfare and risk, indicating a tradeoff relationship between risk-pooling and growth in the determination of welfare. The growth rate responds to changes in the wealth distribution and displays transitional dynamics towards the balanced growth path. (C) 2015 Elsevier Inc. All rights reserved.},
  language  = {en}
}
@article{ClemensHeinemann2018,
  author    = {Clemens, Christiane and Heinemann, Maik},
  title     = {The effects of international financial integration in a model with heterogeneous firms and credit frictions},
  series = {Macroeconomic Dynamics},
  volume    = {23},
  journal   = {Macroeconomic Dynamics},
  number    = {7},
  publisher = {Cambridge Univ. Press},
  address   = {New York},
  issn      = {1365-1005},
  doi       = {10.1017/S1365100517000979},
  pages     = {2815 -- 2844},
  year      = {2018},
  abstract  = {This paper examines the consequences of international financial integration in a two-sector standard incomplete markets model with occupational choice under risk and financial constraints affecting entrepreneurial activity. We endogenize international productivity differences and discuss the implications of international integration for the macroeconomy, inequality, and welfare. Lending countries are characterized by tighter domestic constraints and experience an increase in gross national product, whereas the gross domestic product effect is ambiguous. We conclude that international integration is beneficial only for economies where there are substantial financial constraints on entrepreneurial activity. Otherwise, a majority of households suffer, due to the unequal distribution of welfare gains and losses across the heterogeneous population.},
  language  = {en}
}