Dear Christian,

The development of the current SARS-CoV-2 coronavirus pandemic that causes Covid-19 disease causes various effects, typical for the economic downturn. In some countries, the current pandemic crisis has caused a deep economic crisis in the real economy. In many countries, the deep economic crisis will probably last only up to a few months in an optimistic scenario if, in reality (June 2020), in most countries, the pandemic is entering a declining and dying phase. Unless the current economic crisis turns into a debt crisis of the public finance sector, then it will last longer. Then high economic costs will be even higher. The current period of the SARS-CoV-2 Koronavirus pandemic is a very difficult period for many enterprises and institutions. The forecasts of many research centers show that in the coming months economic growth will drop in many countries by several or even a dozen or so percent. In the media dealing with economic issues, one of the main topics is the issue of potential economic crisis, which is already present in many countries. 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) and this is also associated with various restrictions moving away from home and introducing an order 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. Accordingly, the impact of the SARS-CoV-2 coronavirus pandemic on Covid-19 disease on the global economy is likely to be very large. 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. In connection with these negative aspects of the deepening recession, many current economic data already confirm the thesis that probably now (April 2020) in many countries an economic crisis is beginning, which may after a few months turn into a debt crisis of the state finance 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. Many research centers suggest a high probability of potential for recession in the global economy and in many countries in 2020. 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. 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. 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.

Therefore, it is necessary to permanently improve and increase the scale of anti-crisis socio-economic policy planned, developed and implemented both on the scale of individual countries and as part of coordinated international activities. In some countries, pro-development, interventionist, anti-crisis programs have already been launched to save business entities from mass bankruptcy by introducing additional temporary tax breaks or exemptions, subsidies to employees' remuneration under fiscal policy. On the other hand, as part of monetary policy, central banks reduce interest rates, launch loans for commercial banks on preferential terms, buy lost loans from commercial banks and / or implement sovereign bond buy-back programs to maintain liquidity in the commercial and public financial system of the state. However, the question arises how many months of this type of high budget aid programs can be implemented? To what level can the budget deficit and public debt be increased as part of the implementation of this type of anti-crisis programs helping the economy, enterprises and citizens? To what level can the government allow inflation to rise as a result of this type of economic assistance programs? Can the current 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? In connection with the above, one more question arises: Do you agree with the thesis that as part of limiting the scale of pandemic development through the use of forced home quarantine and forced suspension of economic activity in a significant part of branches and sectors of the economy, it is possible to run the above-mentioned government anti-crisis for many months at the same time programs to help the economy and not paying attention to financial costs, not paying attention to the growing scale of public debt of the public finance system? These questions are still valid in many countries. In some countries, such as in some South American countries, the epidemiological safety instruments used are to a much lesser extent than in some highly developed countries, where the instruments and standards of anti-pandemic safety are the highest. This significant diversity is associated with a particular selection of key priorities. Well, whether the main priority is to slow down the development of a pandemic, so that there is no crisis in the healthcare sector, or whether the main priority is to maintain economic growth to avoid strong recession, high unemployment, a decline in income and consumption, and the emergence of a recession in the national economy. Therefore, in each country, and sometimes also in individual regions, cantons, municipalities of a given country, decisions are made regarding the scale and costs of the epidemiological, anti-pandemic, sanitary, etc. security instruments used, as well as the instruments of anti-crisis, intervention socio-economic policy and analysis of potential effects of the solutions used. Decision making processes and situation analysis are very dynamic because the above discussed issues of the impact of the development of the SARS-CoV-2 Coronavirus pandemic on national economies are developmental, dynamically developing, every day there are more important data that may affect the specificity, nature and scale of correlations analyzed. The impact of the SARS-CoV-2 Coronavirus pandemic on financial markets is also significant. The situation on financial markets is mainly a barometer of social moods and the vision of these moods designed in the media. Only when the nervous and unstable situation prevailing in many markets, both in the real economy and in individual financial markets, including capital markets, currency markets, commodity markets, and securities markets, will it calm down, then greater stability and correlation with real economy also in the context of short-term analyzes. There are many analogies in this issue with the previous crisis occurring mainly in the sphere of banking, i.e. the global financial crisis of 2008, the sources of which I researched and described in the publications available on the Research Gate website. However, the current crisis is of a different nature. It is originally a pandemic crisis with virological sources, characterized by high unpredictability and, therefore, difficulty in applying to the analysis of this crisis models developed during previous crises. In addition, the financial scale of anti-crisis social and economic policy instruments, monetary policy, fiscal policy, social policy, etc. used in some developed countries is historically the largest, even larger compared to the analogous measures used as part of anti-crisis measures implemented to limit the development of the global financial crisis in 2008 year. At present, it is extremely difficult to determine which factors will trigger a major economic crisis in individual countries in a few weeks or months, i.e. whether a pandemic crisis or specific interventionist measures have been used. Because it is difficult to diagnose which factors will prove to be the main sources of crisis in the real economy, so even more so it is also extremely difficult to forecast the situation on financial markets. This difficulty results mainly from new categories of risks that are currently emerging or are defined in the context of economic development, shaping the economic growth rate in the real economy and in the context of the functioning of financial institutions and the economic situation on financial markets. Therefore, it is necessary to permanently improve and increase the scale of anti-crisis socio-economic policy planned, developed and implemented both at the level of individual countries as well as within coordinated international activities. In some countries, pro-development, interventionist, anti-crisis programs have already been launched to save business entities from mass bankruptcy by introducing additional temporary tax breaks or exemptions, subsidies to employees' remuneration under fiscal policy. On the other hand, as part of monetary policy, central banks reduce interest rates, launch loans for commercial banks on preferential terms, buy lost loans from commercial banks and / or implement sovereign bond buy-back programs to maintain liquidity in the commercial and public financial system of the state. However, the question arises how many months of this type of high budget aid programs can be implemented? To what level can the budget deficit and public debt be increased as part of the implementation of this type of anti-crisis programs helping the economy, enterprises and citizens? To what level can the government allow inflation to rise as a result of this type of economic assistance programs? Can the current 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? In connection with the above, one more question arises: Do you agree with the thesis that as part of limiting the scale of pandemic development through the use of forced home quarantine and forced suspension of economic activity in a significant part of branches and sectors of the economy, the above-mentioned government anti-crisis can be conducted simultaneously for many months programs to help the economy and not paying attention to financial costs, not paying attention to the growing scale of public debt of the public finance system? So there are many interesting issues in which you can undertake scientific research. There are many questions that we will know the answers in a few months. However, it is now known that the economic, social and financial costs to the economy caused by the development of the SARS-CoV-2 Coronavirus pandemic will be very high. In some countries, through the so-called Anti-crisis shields (launched anti-crisis instruments of socio-economic policy, etc.), public debt will increase significantly, therefore the risk of instability and a significant reduction in the level of security of the state's financial system will increase, as well as the risk of destabilization of the situation on financial markets. I conduct research in this area. The conclusions of the research I published in scientific publications that are available on the Research Gate portal. I invite you to scientific cooperation.

Best regards, Have a nice day,

Dariusz Prokopowicz

Hopefully this would be a learning opportunity that would help plan and create a huge emergency fund for future disasters

From a policy perspective, the covid-19 pandemic crisis shows the need for testing of the population early and tracing contacts of those infected to prevent community spread so that mass lockdowns and the associated lockdown waste can be prevented. In the case of the US, it is clear that covid-19 was likely spreading in some communities weeks, or perhaps even months, before the first positive case was detected. This is especially important for developing countries where medical infastructure is weak and can be easily overwhelmed by a flood covid-19 patients.

The abrupt mid-March locking down the US economy caused real GDP to decline at an annualized rate of 5% in Q1 20 and will likely decline at annualized rate of at least 20 to 30% in Q2 20 before the expected rebound in the later half of this year. Industrial production fell about 15% between February and April and the unemployment rate of 14.7% in April was the highest in the US since before WWII. Even if the 2020 contraction follows a sharp V pattern with a rapid recovery, it will be at least as severe as the impact of the 1980/1981-2 double dip recessions and the Great Recession of 2007-09. Should the sharp initial stage of the recovery slow or stall after a quarter or two, it could turn out to be significantly worse. It is also important to note that the pandemic in the US has been disproportionately severe on both the African-American and Hispanic communities. And, they have borne a disprotionate share of the economic impact of the 2020 contraction. For example, the BLS reports the May unemployment rate for whites, African-Americans and Hispanics at 12.4%, 16.8% and 17.6%, respectively.

Thank you all for your very interesting answers and opinions

LOCK-DOWN LESSONS (part I):

1) Wealth - in terms of savings, cultivable land-plots and rent-providing properties - is mportant in times of rapid business disruption which may interupt regular income. So policy incentives, financial education and market information should be oriented to enhance people's savings and investments in wealth.

2) Rural areas with plenty of natural space, cultivable plots, green-fields and proximity to wilderness are better than the urban and peri-urban areas for people's freedom, safety, dignity and social cohesion even under the restrictions of social distancing. Urbanity is mass vulnerability. So state institutions must do whatever it takes to prevent urbanization, urban sprawling and growth of brown-fields.

3) The quality of products, services and processes are less important than the quality of the context (place-system). Land-use planning, infrastructure projects, environmental planning, landscape management and urban planning must be integrated to make a single holistic design: a civic macro design. The cardinal element of a civic macro design should be a perfect inter-functional system of motorized and non-motorized transportation for people: multi-form inter-modal mobility to maximize safe walkability and easy access to open public spaces and greenaries.

Soon, I'll be back with LOCK-DOWN LESSONS (part II)

Thank you dear Dipak Pant