This dissertation focuses on two topics in macroeconomics. The first two chapters study the interaction between family and inequality. The first chapter develops a framework for evaluating optimal income tax progressivity with endogenous marriage formation. The second chapter studies how migration frictions interact with parental locational and human capital investment decisions in the context of China. The third chapter revisits the role of strategic complementarity in pricing on monetary non-neutrality.

Chapter 1: The income distribution in the United States has undergone significant transformation over the last four decades. Accompanying the rise in inequality are an increase in positive assortative mating and a steady decline in marriages, especially amongst non-college educated individuals. The literature studying optimal redistribution typically ignores the marital margins, both in terms of who gets married and who marries whom, although they have important welfare consequences. This paper revisits the optimal design of taxation policies using a life-cycle consumption-savings model augmented with an endogenous marriage market. Through the lens of the model, the optimal income tax features high degree of progressivity for both single and married households combined with large marriage bonuses.

Chapter 2: The hukou system is a unique institutional feature in China that restricts internal mobility mainly by blocking access of migrants to public services and programs. In this chapter, I propose that these institutional mobility restrictions play a role in enabling intergenerational transmission of income and economic status, in particular by suppressing human capital investment, both in terms of time and money, by parents on the lower end of the income distribution. Another argument that follows from my hypothesis is that migration frictions can generate a dynamic welfare cost through lower skill formation, in addition to the static losses that are emphasized in the literature. I build a two-region overlapping-generations model with household heterogeneity to show how migration decisions interact with parental human capital investment decisions to exert downward pressure on intergenerational mobility. A counterfactual analysis in which migration frictions are reduced suggests that removal of some \textit{hukou} restrictions can increase the total human capital stock in the economy by 4%, increase aggregate output by 7%, and reduce the intergenerational rank-rank elasticity by at 7 percentage points.

Chapter 3: This chapter proposes a parsimonious framework for real rigidities, in the form of strategic complementarities, that can generate real and nominal dynamics and match key features of the data across several literatures. Existing menu-cost models featuring strategic complementarities require unrealistically volatile shocks to idiosyncratic productivity to be consistent with pricing moments. We develop a simple menu-cost model with strategic complementarities along with idiosyncratic productivity and demand shocks that are disciplined by the data. This approach allows us to overcome previous criticism from analysis of models that employ only an idiosyncratic productivity shock and calibrate solely using data from the price-adjustment literature. Despite its simplicity, the model can generate sizable monetary non-neutrality along with the magnitude of cost pass-through documented in previous studies, while also remaining consistent with micro pricing and markup evidence.