Question

If households and firms believe the economy will be in a recession in the future, will this necessarily cause a recession, or have any impact on output at all?

Short answer

Yes, it is likely that if firms & households believe that economy will be in recession - it will trigger recessionary decline in output.

Step-by-step solution

Step 1. Introduction

Recession is the phenomena of decline in overall level of economic activity. It is characterised by two consecutive quarters of economic decline paired with increase in unemployment levels.

Explanation 

If households & firms believe that economy will be in recession, they will reduce their planned consumption & investment expenditure respectively.

This will decrease Aggregate Demand. It implies that lesser AD is equal to Aggregate supply at a lower level of income, output & employment.

So, the equilibrium income, output & employment fall - which can create further recessionary tendencies in economy.