The tracking of pupils by ability into elite and non-elite schools represents a controversial policy in many countries. There is no consensus on how large the elite track should be and little agreement on the effects of any further increase in its size. This paper presents a natural experiment...

We study a quality-ladder model of endogenous growth that produces stochastic leadership cycles. Over a cycle, industry leaders can innovate several successive times in the same industry, gradually increasing the magnitude of their technological lead before being replaced by a new entrant....