Does the media coverage of the recession make it worse?

Question

If the economy is starting to experience an economic downturn and the media continuously covers it--wouldn't it make the recession worse? When I watch the news about the recession, I get scared. It makes me not want to spend money. It makes me scared to put my house on the market, to buy a car, to go to Target, it makes me want to save money. Wouldn't this type of fear just make it worse because people start hoarding their money away?

Answer 1

Yes.  Probably.  We'd like to think that people react more to their own personal situation more than broad  trends they see on TV, but people do take notice.

There are two types of people who will not decrease their spending, though:  (1) People living absolutely hand-to-mouth who *can't* decrease their spending at all or (2) long-term investors who will start snapping up investments while their price is low.