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...

Imposing a minimum quality standard (MQS) is conventionally regarded as harmful if firms compete in quantities. This, however, ignores its possible dynamic effects. We show that an MQS can hinder collusion, resulting in dynamic welfare gains that reduce and may outweigh the static losses which...