Economic cycles as a source of social influence on individuals

The current review summarizes emerging research in psychology and associated disciplines showing that the economic cycles exert social influence on individuals across a range of psychological domains. Most research on social influence focused on how factors in the proximal environment impact individuals, while influences emanating from the state of the economy as a whole received far less attention. I review the development of different intellectual traditions examining social influence to explain the relative lack of attention to economic cycles and position emerging work on the topic relative to past research. I then review research on how economic cycles influence individuals by focusing on influences relevant to intraindividual, interpersonal, and intergroup processes. A review of this work shows that the understanding of core phenomena of interest to social psychology (e.g., attributions, altruism, and racial tensions) can be meaningfully extended by studying the complex interplay between the economic system and the psychology of individuals embedded within it. This stream of research also uncovers mechanisms through which economic cycles generate or amplify problems for the broader society, which I propose is both the key reason why more work on the topic is needed as well as the key direction for future work.