Thursday, May 21, 2009

Psychology and the recession

Today Harvard's Daniel Gilbert writes about the psychological costs of uncertainty, whether they stem from the recession and the unknown risk of individual unemployment, or from getting a random stronger shock, even when you're wired to get a small shock no matter what.

This contrasts with the literature that reveals short-run improvements in population health associated with the business cycle. If I remember correctly, however, suicides are countercyclical, increasing during downturns, suggesting that at least some component of mental health is similarly depressed when the economy goes sour.