We propose a new business cycle theory. Firms need to randomize over firing or keeping workers who have performed …

Using responses obtained through the Nielsen Homescan panel survey, we explore the differences between managers' and … non-managers' expectations and perceptions of inflation and unemployment. By and large, managers and non-managers exhibit … information provided in a randomized control trial. Finally, the inflation expectations of managers deviate systematically from …

value because it reduces lifetime consumption. The main empirical implication of contract theory is shown to be closely … compared with market sectors. The theory is used to analyze some features of the U.S. employment system. Its empirical support …