The Great Recession was a deep downturn with long-lasting effects on credit, employment and output. Julian Kozlowski suggests crises produce persistent effects because they scar our beliefs. These persistent changes in the assessments of risk come from observing new data and it is this new-found knowledge that is inducing long-lived effects on economic choices. Julian Kozlowski is a Senior Economist in the Research Division of the Federal Reserve Bank of St. Louis. Image courtesy of Julian Kozlowski.