https://macropaperwarehouse.com/authors/nicolas-petrosky-nadeau/Nicolas Petrosky-NadeauHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/evaluating-macroeconomic-outcomes-under-asymmetries-expectations-matter/https://macropaperwarehouse.com/papers/evaluating-macroeconomic-outcomes-under-asymmetries-expectations-matter/<p><strong>Research Question</strong></p> <p>This paper investigates whether and how assumptions about household and firm expectations alter the macroeconomic implications of asymmetries commonly embedded in macroeconomic models. Specifically, it asks: when a model features a nonlinearity — such as an asymmetric monetary policy rule or a nonlinear Phillips curve — do the longer-run average outcomes and the distributional properties of inflation and unemployment depend on whether agents have <em>rational expectations</em> (RE, accounting for the possibility of future shocks) versus <em>perfect foresight</em> (PF, not anticipating future shocks)?</p>