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Truth or Macroeconomic Consequences: The Demise of References in the United States

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  • Miles Cahill

    ()
    (Department of Economics, College of the Holy Cross)

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    Abstract

    Since the early 1970s, there has been a dramatic change in the way firms handle reference requests. Before 1970, firms would willingly provide detailed information about a former employee's job performance. More recently , firms have become reluctant to provide information due to a perceived increase in either the frequency of employee defamation suits or the magnitude of the settlements. This paper develops a model in which firms willingly provide references when associated costs are low, but cease providing references when costs rise dramatically. This model predicts several consequences of such a decline in the use of references; a key prediction is an increase in the natural rate of unemployment.

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    Bibliographic Info

    Paper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 9604.

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    Date of creation: Jan 1997
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    Publication status: Published in Journal of Post Keynesian Economics, Spring 2000, Vol. 22:3, pp. 461-487.
    Handle: RePEc:hcx:wpaper:9604

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    Keywords: references; unemployment;

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