Economic downturns have more than twice as much impact on individual happiness as equivalent upturns, according to surveys from 151 countries and a wealth of other data. The finding, reported in a working paper by Jan-Emmanuel De Neve of University College London and five colleagues, may explain why well-being has stayed flat in most developed nations despite huge gains in gross domestic product: Because people experience macroeconomic losses more acutely than periods of growth, the occasional recession can rapidly undo any well-being gains from longer periods of economic expansion.

(Source: Harvard Business School Working Knowledge)

Published in Dawn, Economic & Business, November 24th, 2014