How the economy shapes the way we think about ourselves and others.

While recessions are a regular feature of modern economic life, researchers have only recently begun to explore their psychological implications. This review examines evidence that recessions are linked to changes in how people regard themselves and others. Specifically, it reviews work suggesting that recessions are associated with declines in individualism and increases in interdependence. It also reviews evidence indicating that economic turmoil is associated with greater racial animosity. Finally, it considers some psychological processes underlying these effects.