Time is a psychological concept of discussion in all times but it was privileged the matter of study during the Modernism (covering the first three decades of the 20th century).
It is differently perceived and analyzed by the animal race: animals do not perceive the time in the multiple perception of human being. In particular, the twentieth century shows up the duality of interpretation to consider time and space unique and objective, or personal and contingent.
Economic depression in the 1870's and 1880's had caused serious unemployment among the working class and by 1890 modernization had been so successful in countries that made conflicts. It came in 1914 with the First World War, which brutalized men and destroyed European self - confidence. As a result the most profound fear that had afflicted the Victorians was religious in nature. Men lived a life without a meaning and without God. This doubt and insecurity, this sense of isolation is clear in the work of writers, who left their characters to speak for themselves, to present their own version of reality.
So all became relative. In 1910, Albert Einstein's General Theory of Relativity said that space and time did not exist as separated phenomena, but changed according to the point of view of the observer. Also the philosophers Bergson and James rejected conventional ideas of time. Bergson showed that the time of physics does not coincide with the time of consciousness. The chronological time is objective and it is organized by mankind in order to better arranging their lives. They use it with reference to three organizing principles: past, present and future, which describe and tell about facts and events. Instead philosophical time is better understood if called the time of the consciousness. There is a simultaneous concept of time that is one which is all inclusive: it includes past, present and future. The time of consciousness is only the present which is the result of our memories and future expectations.
So past and future exist together with the present in people's mind, which is called stream of consciousness. The stream is what constituted a person's mind and determines his thinking.
Writers started to use the stream of consciousness in their works to express the thoughts and feelings of their characters. An example of this technique is in the first chapter of Mrs. Dalloway, written by Virginia Woolf, when Mrs. Dalloway is in a flower shop and hears a limousine backfiring. Everyone in the street gathers around it, waiting to know who the important person inside is. Mrs. Dalloway thinks it is the Queen and imagines a party being planned at the palace, the of her own planned party. This extract is the beginning of the novel Mrs. Dalloway , which is in medias res. The narrator is omniscient, so she seems to know everything about the character and the reader feels in the character's mind.
In addition, in the extract there is a very important element, which has a double level of interpretation for the intelligent reader: on the one side there is the time of consciousness that render true the interior monolog. The other level is the time of clock, that is chronological time underlined by the Big Bang strike in the hours. Thus, the extract very well synthetizes of two concept of time: the traditional concept of time recalled by the external world (the world of Westminster, the world of the Acts of Parliament) and subjective and inner time (the time of consciousness that is simultaneous as Bergson and James have thought).

In conclusion another example of stream of consciousness is in The Hours, written by Michael Cunningham, when Clarissa Vaughn walks down the street, thinking of buying flower when she sees a plastic bag floating in the wind. In her mind she follows the path of the plastic bag into the Hudson river and finally into the ocean where a turtle, a creature that can live up to 200 years of age, she thinks on, will eat the bag and die. Then, she returns to her current task, buying flowers.
So also in Postmodernism the concept of time moves into the inner side of characters. It means it is subjective and personal and it can be compressed or extended (psychological time).