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 …

to forgo the potentially valuable private information of their managers. We study the introduction of job testing across … 15 firms employing low-skilled service sector workers. When faced with similar applicant pools, we find that managers who … appear to hire against test recommendations end up with worse average hires. This suggests that managers often overrule test …