Discuss how countries decided to respond to the adverse impact of coronavirus pandemic on their economies. Give examples of policy measures that the following countries have been introducing to help the economies to avoid deep recession. Please discuss both fiscal and monetary policies introduced and their potential effects on the components of GDP, unemployment, inflation and other macroeconomic indicators in the USA
Dear Mokhimbonu Azamjonova,
Current estimates show that it is likely that in 2020 the global economy will significantly slow down its growth by several percent. compared to the previous year. Perhaps there will also be a recession in the short term. Many current economic data already confirm the thesis that probably now (April 2020) in many countries an economic crisis begins, which may after a few months turn into a debt crisis of the state's financial system. If this situation occurs in many countries, then in 2020 the global economy will most likely slow down its growth by several percent. compared to the previous year. In 2020, the main factor behind the decline in international trade, international capital flows and other production factors, international economic cooperation, etc. will be the development of the SARS-CoV-2 Coronavirus pandemic causing Covid-19. What do you think about my research thesis? In connection with the above, other research questions arise: Can the currently beginning economic crisis in many countries turn into a crisis of public finances? If it is possible, what anti-crisis economic reform program should be currently planned and implemented in these countries to avoid a significant increase in the risk of potential loss of liquidity in the financial system of the state? The issue of the impact of the development of the SARS-CoV-2 Coronavirus pandemic on national economies discussed above is developmental, dynamically developing, with every day more important data appear that may affect the specificity, nature and scale of the correlations analyzed. Many tourism, hotel, catering, cosmetics, etc. businesses are currently losing most, almost all, or all customers because people are afraid of SARS-CoV-2 coronavirus infection causing Covid-19 disease and this is also associated with various mobility restrictions away from home and with a warrant or recommendation to stay at home as part of preventive quarantine in many countries. As a result, many companies are already recording large declines in sales and profits, limiting employment and / or stopping their business. Many economic analytical centers estimate that due to the development of the Coronavirus pandemic in 2020, the global economy will slow down its growth by several percent. relative to the previous year. However, the decrease in sales revenues and profits does not apply to all enterprises and branches of the economy. It can already be seen that there are sectors in which enterprises are recording sales increases. For example, companies developing sales via the Internet, developing e-commerce, retail chains that offer sales via the Internet, etc. Also, new internet media, including social media portals are a type of media and at the same time a type of company that, despite a potential decline in advertising revenue, may notice relative increase in importance, share in the media market. Due to the development of the SARS-CoV-2 Coronavirus pandemic causing Covid-19 disease, the processes of digitization of the economy have accelerated. Currently (April 2020), in many industries and sectors, more and more companies are developing their activities via the Internet, remotely providing their services and selling their products under e-commerce. Many companies that did not do this before now switch to remote activities, carried out electronically via the Internet. The importance of Internet marketing, including viral marketing, Real-Time marketing conducted on social media portals is increasing. The development of electronic banking is also increasing, including online and mobile banking. The share of payments made electronically, without cash via the Internet and during payments with the use of electronic bank cards is increasing. More and more citizens paying in stores do not use cash but make contactless payments. Limits for all contactless payments made with bank cards have just been increased in some countries. Therefore, the SARS-CoV-2 Coronavirus will increase the share of payments made electronically in the context of all payments made in national economies, but it does not necessarily lead to the creation of a completely new cashless economic system. This cashless system has already existed since the 1990s, but in the past it was only a specific part of the overall payments, the financial system, etc., and gradually increased and underwent subsequent stages of the technological revolution. However, at present, due to the development of the SARS-CoV-2 Coronavirus pandemic, this development, i.e. the development of electronic economy, online and mobile banking, e-commerce, etc. has accelerated strongly. Therefore, the impact of the SARS-CoV-2 Coronavirus pandemic causing Covid-19 disease on the global economy is very large. The high probability of potential recession of the global economy and in many countries in 2020 is currently estimated. Well, in 2020 it is no longer trade wars that will be the main factor in the decline in international trade, international capital flows and other factors of production, international economic cooperation. I posted more information on this topic on my RG profile. I conduct research in this matter and encourage scientific cooperation.
Best wishes.
Dariusz Prokopowicz
Dear Mokhimbonu Azamjonova,
It can be clearly seen that Corona virus has impacted on most of the countries economics and several companies financial situations. However, these impact is very dangerous for countries who depend on just one sources of income, and a good example of this might be Iraqi case because they depend all most all on Oil and its price fallen slightly. So that if this situation continuous seriously they will impact on their economics.
corona virus adversely affects the domestic and global economy.
deflation and inflation
people cannot attend in the job or productive activities. markets are closed down. the root level producer e.g. farmer cannot sell their goods to the market at expected price; rather sell it at below market price because of demand falls. consequently deflation at root level arises. in contrast; shortage of product in the city area induces inflation.
Unemployment and Falls in aggregate demand:
many companies cut the salaries while several companies cut the labors . consequently; higher unemployment makes the people poor that further reduces the aggregate demand.
Government Revenue: tax; remittance;export
lower salary; unemployment reduces the tax revenue of the govt. lower production reduces the export income. expatriates lost the job; consequently remittance also in declining trends. so the government revenue will fall drastically.
bankruptcy of the Government:
in addition to the extra expenditure for health sector ; it is really difficult to pay allowances for unemployed; old-age; disable people. lower government revenue enforces it to take loans from other countries and international agencies. as a result debt burden rises and deficit may makes it bankruptcy.
ultimate effect is recession; and if it lasts for long time; then may convert to Great depression.
At the time, first priority of each country is to save the life of people, however it is expected to cut down the interest rates and other measures like that.
i think it effect on the whole economy as a result of disturbing the financial markets and all activities related
Hi everyone ...i can add to all these important factors the fact that covid19 has not just impact the today economies but will do so in further years..but at this stage this virus is affecting the BOP of many countries of the world and hence can create a negative Bop result at the end of the year...the injection of money in the circulation will create inflation and can further be uncontrolable for certains economies mostly those of undeveloped world..this virus will equally affect the gross domestic product of many countries, based on this will follow a reduction in per capital incore , a reduction in consumption expenditure and an increase in health expenditure in certains countries.
Hi! I put my contribution on pone paper days ago, yu can read it on my researchgate site , (How to pay of the ward... of Coronavirus) . Perhaps it is more centric on Spanish and south European countries but it is a common problem I think, See you soon your contributions
Ignacio Arellano
Whichever way you look at it, whether from the demand or supply side, in the short term, the impact is immense Mokhimbonu Azamjonova . Some countries have started releasing their Q1 2020 GDP numbers and there is contraction.
The USA released their jobless claims a day or two ago and the number has breached the 20 million mark.
https://www.wsj.com/articles/u-s-unemployment-claims-likely-continued-at-record-levels-11587029401
Dear doctor good day.
In this reply there is a visual comparative data about deaths, infects, and DEBT/GDP >>> https://www.researchgate.net/post/The_novel_Coronavirus_in_N_Italy_Lombardia_COVID19_2019nCoV_SARSCoV2_shows_a_fatality_rate_compatible_with_SARS-MERS_Why#view=5e9852227efcd833ec45f125
In this reply there is an attempt of comparative past epidemic event (Flu Spanish included) and financial curve behaviours >>> https://www.researchgate.net/post/The_novel_Coronavirus_in_N_Italy_Lombardia_COVID19_2019nCoV_SARSCoV2_shows_a_fatality_rate_compatible_with_SARS-MERS_Why#view=5e8dcf36007e2c7b9b2825d2
In this reply there is a possible evaluation of GDP loss and DEBT/GDP increase for Italy in this phase >>>
https://www.researchgate.net/post/The_novel_Coronavirus_in_N_Italy_Lombardia_COVID19_2019nCoV_SARSCoV2_shows_a_fatality_rate_compatible_with_SARS-MERS_Why#view=5e82443c7fd2ce39c56f1126
Thank you for attention in this dramatic moment for my country. Have a nice week and. --sv--
Analysing the economic impact of the COVID-19 is worth a huge job. All branches of the national and the international level are concerned.
In the domestics stage, people are confined. This means that either they work at reduced hours in the home office of they don't work. This lead first to the reduction of the productivity of the company and the salary of employees. The next consequence in the long run is the aggravation of the unemployment rate and the bankrupcy of fims. This situation leads to the inflation of prices in the market due to the fact that there are less ans less goods to be sold. The inflation could push states to reduced credits rate up to negative percentages or to just introduce money in the economy... You can imagine the next level: No goods, No foods, No Work, No activity, therefore Poverty and Debt at every stages of the natonal economy.
When we analyse the global case, it is the aggravation of all national economis. Countries cannot afford the production for the national demand. Therefore will not export. This means that If Country A doesn't Export, it cannot also Import because Country B doesn't Export. This leads to the stagnationation and the deterioration of the world econonmy. Such situations could even lead to wars due to the natural instinct of the human being. Countries will now want to take by force to satisfy their population.
This COVID-19 can be very vicious if we don't find solutions rapidly.
Thanks
As at present, over 2.2 million cases of covid-19 have been recorded throughout the world and more that 150 thousand deaths have occurred and US is taking the lead in both the cases and the death with daily exponential increase. So, there is no doubt that the country is likely to be mostly affected and some other countries that mostly depend on their economy, like Nigeria.
Ever before now, the country has shut down their production and total lockdown has taken effect in almost all the states. And after envisage so many losses the country could still incurred, president Trump boldly came out to reopen the economy of the country, even though the right to do that rest on state.
Therefore, the issue at present is not in the policy to put in place to revitalize the economy but in how long it will last. There is no how a well-coordinated policy could be put in place for now to have meaningful impact on the economy, if the country continues to record much increase in cases of covid-19. However, effort for now should be concentrated on how to flatten the curve and how economic activities could begin in earnest in states whose impact of covid-19 is not much.
A country like Nigeria whose cases for now is still less than five hundred, can better their economy by embanking on total closure of borders and ensure that economic activities begin in virtually all states, except Lagos, Ogun and Abuja whose cases of covid-19 are a bit much. Even in these states, economic activities could still take place if adequate measure could be taken to ensure that people observe social distancing and some other measure to reduce the transmission. Doing this will help to minimize the impact of covid-19 in the short run and help to take necessary measure to combat its long term effect.
HAMMED, YINKA SABUUR
NIGERIA.
18th April, 2020
I put my own contribution in my page on researchgate, you can see it: How to pay for the war... of the corona virus
The covid-19 has taken the world economy into new dimension. Report today the oil price slice down to less than 3 dollar per barrel the worst that ever happened since 1986. What a tragety.
As I belive, no doubt such an event has a great impact on the global economy. Oil prices, general trade, political clashes, and other factors that influence the global economy have affected by coronavirus.
In my country, Iraq ... it is the government that supervises prices.
Hi Sir .. Ignacio Arellano could you answer here for the more benefits.
In my opinion, our generation is so lucky because we are equipped with technology and fast-track communication. Thus, when facing this current recession of the economy, the impacts are different from one country to another country. There are continuous assessments to data and economic strategies are developed as fast as they can to cope with the recession. Yes, what we face currently is far more worst than the Great Depression. However, we have socio-economic/technological tools that they didn't have. I guess we are lucky in that sense.
The effects will be two-sided. In one hand, the Covid-19 attack the two milestones of todays economy. One of them is the human workforce and the personal attendance at the workplace. We can be talking about an economic and employment crisis, and it will come a social crisis as well in autum. Yes the new technology can help, but not every case. Lots of people have so job, what can not change to home office and telework. (e.g. shopkeeper, nurses, operator in a factory). In the middle and long term the firms are going to invest in robot technology, RPA or AI as well. The employer and employees are not ready to change. The parties of the labor market have not the knowledge to changee. I mean the employee has to learn new skills. It will be very important, because the robotization of the labor market will have the same employment effect as today the pandemic. The state and the firms have to ellaborate a new social benefit system, what will fit in the new circumstances. I think this situation can be a prolusion of the labor market digitalization. If the state and the partners can implement good solutions now, the labor market digitalization will have less bad effects, because the situation will be the same. The human workforce will be in dangeure.
It's been six months since my last comment. But unfortunately not much has changed. The current (October 2020) 2nd wave of the SARS-CoV-2 (Covid-19) pandemic is developing similarly dynamically as the 1st wave of the pandemic six months ago in the period March - April 2020. The economic effects may be just as large and may cause a significant slowdown in economic growth.
Best regards,
Dariusz Prokopowicz