The present study of three generations' families living together during a period of marked economic dislocation investigates whether supportive grandparents can ameliorate the negative effects of economic stress on parenting and on teen outcomes. The study focuses on harsh parenting and adolescent depression, which has been shown to be especially responsive to economic stress. Three hypotheses were investigated: (1) in extended families there is a link between economic adversity and adolescent depression that is mediated by harsh parenting; (2) grandparent support diminishes the relationship between economic pressure and harsh parenting; and (3) grandparent support diminishes the relationship between harsh parenting and adolescent depression. Data were collected from a community sample of 62 extended families with an adolescent during a period of marked economic dislocation in Bulgaria. Mothers, fathers, and adolescents completed questionnaires about perceived economic pressure, parents' harsh parenting, and perceived support of grandparents. Adolescents also completed a measure of self-reported depression. Additional interviews were conducted with every eligible family member about family relations. Results showed that even though there was significant economic stress reported by parents, adolescents reported moderate levels of depression and low levels of harsh parenting by mothers and fathers. Correlation and regression analyses revealed that whenever respondents experienced support by grandparents, it made a difference for family members. More specifically, despite economic stress, mothers who experienced the support of grandparents tended to exercise less harsh parenting practices than mothers who lacked such support. Furthermore, when grandparents were supportive, harsh parenting was not associated with adolescent depression. These findings are discussed in the light of existing studies of families under economic pressure with a special focus on extended family relations and the role of cultural context. [ABSTRACT FROM AUTHOR]