Will there be shift in Economy world order post CORONA VIRUS-19 pandemic.? any model forecast.
Dear George Duke Mukoro,
If in connection with the development of the SARS-CoV-2 coronavirus pandemic causing Covid-19 disease in 2020 there is a deep global economic crisis, then the economic effects in many countries and for many enterprises and companies, including many small business entities as well as for some large , internationally operating corporations will be large. Depending on how individual countries cope with the SARS-CoV-2 Coronavirus pandemic, what financial outlays will be allocated to the currently launched anti-crisis, interventionist, macroeconomic economic policies, they will recover from the economic crisis faster or slower in a few months. Similarly, in the microeconomic and mesoeconomic approach, depending on the specifics of the business and the more or less innovative logistics solutions and other individual enterprises, companies, financial and public institutions will respond to specific crisis threats to a different degree, to economic downturns and to varying degrees use future development opportunities to achieve business success in the coming years and achieve specific development goals. Another issue is the increase in volatility, including the amplitude of fluctuations in the valuation of financial instruments, shares and bonds on stock exchanges, currencies on forex currency markets, commodities on commodity exchanges and other assets, factors of production on capital markets. In the situation of economic crises, increased uncertainty, and increased investment risk, the above-mentioned valuations of specific assets on capital markets usually decrease quickly, and when the economic and financial situation of enterprises improves and thus the economic situation on individual markets, the above-mentioned valuations of assets on stock exchanges increase. Some business entities efficiently managing investment, credit, market risk, etc., and better forecasting future changes in economic processes in the real domestic and / or international economy gain the possibility of using these increased volatility of securities valuations on stock exchanges, commodities on commodity exchanges, etc. to increase scale and efficiency of business operations and gain an advantage over competing entities. In this situation, the risk of strategic takeovers by foreign corporations increases. Also on an international and macroeconomic scale, individual countries may also remodel their economic processes, comparative advantages, carry out specific reforms during the crisis, which will motivate enterprises in crisis to make necessary restructuring processes, etc. which may lead to a significant change in significance after a few years economic relations of individual countries. However, it cannot be ruled out that the currently developing (April 2020) economic crisis in individual countries, a crisis determined by a decline in both demand and supply in particular types of markets, in specific branches and sectors of the economy may turn into a public debt crisis in the following months caused by a strong increase in public debt and budget deficit. Then the possibilities of financing specific interventionist, anti-crisis and Keys budget policies would be very limited. In such a situation, the possibilities of selling Treasury bonds to foreign investors are also decreasing. Also, the application of specific monetary policy instruments by central banks in individual countries is not the same. The diversity of mild monetary policy instruments used by certain central banks as interventionist anti-crisis measures used since September 2008, when the largest global financial crisis began, showed how large the differences in this matter can be. The level of maintaining liquidity in the financial system, including primarily in the system of commercial banks, depends on how efficiently and with what instruments the interventionist anti-crisis monetary policy will be applied by specific national or international (e.g. European Central Bank) central banks. the maintenance of lending depends on this efficiency, i.e. including the scale of granting business loans to enterprises, which translates into the possibility of financing more or fewer new investment projects with a loan, and thus improving or deteriorating the economic situation in the following months and years. The number of new jobs created, whether the level of remuneration and real income of citizens will improve, what will be the level of sales revenues and corporate profits and the level of financial revenues from tax burdens to the state budget and budgets of local government units, which will translate into the state of public finances. All of the above-mentioned issues in the following months and years will have an impact and their share in the faster or slower recovery of enterprises, sectors, industries and entire economies from the economic crisis. On my RG profile, I have posted more information on this topic in ongoing discussions. In addition, I researched and described these issues in my scientific publications, which are available on the Research Gate portal.
Greetings.
Dariusz Prokopowicz
The major power shift for a new economic conjuncture are investments and innovations related to human health:
https://healthmanagement.org/c/healthmanagement/issuearticle/health-the-economic-growth-engine-of-the-21st-century
Getting through this global and bio-social health crisis will take longer than initially expected, i.e. 1-2 years.
Neo-classical economics will be buried by Covid19, but it is important to fight the virus and not to destroy the economy by interventionist storms of political authoritarianism; macro-prudence is in high demand, concerning the political economy of this bio-logical crisis.
A more human species-appropriate life-style is required, in rational and ethical terms.
In this open question on RG I publish some historical charts about sell off and recovery of financial markets to past epidemic-pandemic events. Moreover for Italy there are some targets of GDP & DEBT/GDP ratio . I hope useful >>> https://www.researchgate.net/post/The_novel_Coronavirus_in_N_Italy_Lombardia_COVID19_2019nCoV_SARSCoV2_shows_a_fatality_rate_compatible_with_SARS-MERS_Why
Will the model be a quantitative economy? It is known that this model is based on three basic determinants: mathematical application to natural phenomena, building reciprocal efficacy between humans on unlimited consumer desires, erasing the semantic barrier, and criteria between material wealth.
I think COVID 19 firstly impacts the real sector of the economy which is different from the privious crisis. The health issue significantly impacts real economic activities and it will have a contagion effect on international trade and the financial sector.
It is very difficult to measure the impact on the overall economy because it very depends on how long the pandemic exists. I believe that there will be a new baseline of the economy before it comes back to increase gradually.
