Education decisions determine a great part of future income. This paper argues that if education is financed by parents' current income a lump-sum tax reduces inequality if all parents have strict investment incentives. However, if some parents are indifferent there is a possible decrease in the...

This paper analyzes a heterogeneous-agents endogenous-growth model incorporating both transaction costs and social capital. An individual can either become an active part of the society's middle-class networks of trust and mutual cooperation, thus making a positive contribution to overall social...

The paper investigates the effects of intra-family talent transmission when human capital exhibits indivisibilities and parental financing of education involves borrowing constraints. Positive talent correlation reduces social mobility but steady state inequality and macroeconomic...

This paper questions the three standard propositions used by politico-economic models of growth and distribution according to which (1) rising inequality induces more government redistribution; (2) more government redistribution is financed by higher distortionary taxation; and (3) higher...