Impact of Covid-19 on the Economy

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Background

The outbreak of the COVID-19 pandemic was a rare and unprecedented occurrence, and governments around the world scrambled to implement emergency measures, such as social isolation measures, public awareness programs, testing and quarantine policies, and income support packages. The governments of the world hurried to implement emergency measures, including lockdowns, testing and quarantining, travel restrictions, and economic packages. The primary objective of these activities was, on the one hand, to establish social separation between people to prevent the transmission of the disease, and, on the other side, to reduce the negative economic impact (Ashraf, 2020). In this essay, I assess the projected economic effects of government policies by analyzing their impact on the economy.

Effects of COVID-19 on the Economy

The onset of the extremely contagious COVID-19 pandemic came as a complete surprise, accompanied by unparalleled uncertainty over the diseases lethality and the availability of a vaccine. The governments of the world hurried to implement emergency measures, including lockdowns, testing and quarantining, travel restrictions, and economic packages. The primary objective of these activities was, on the one hand, to establish social separation between people to prevent the transmission of the disease, and, on the other side, to reduce the negative economic impact. However, these activities increased the uncertainties surrounding their effects and consequences. Even though lockdowns could be effective in decreasing new infections, they also caused economic separation, harming the jobs and earnings of tens of millions of individuals (Ashraf, 2020). The mass loss of jobs and earnings led to a decline in the general economy of the country and the world.

Government Interventions

As the COVID-19 pandemic continued, governments and emergency responders focused on immediate needs, such as increasing hospital capacity, addressing hunger, and protecting businesses and families from foreclosure and bankruptcy. The majority of funds provided thus far by the World Bank, IMF, other regional development banks, and central banks were allocated for protective equipment in hospitals, the stabilization of financial institutions, the payment of companies that can provide goods and services to essential workers, and direct cash support for households (Ashraf, 2020).

How the Relationship between the USA and Other Global Economies affects US-Based Companies

The United States has maintained strong relationships with other global economies which have helped companies based in the United States. Companies based in the United States and the United States at large benefit when certain activities, such as those involving scarce natural resources or customers, are relocated to other countries. This improves the economic outlook for the United States. Those companies expand their markets to other parts of the world thus increasing their revenues.

Elaboration

I found the learning activities based on the Federal Reserve Policy very important and beneficial. I learned that Federal Reserve uses monetary policy to pursue stable prices, maximum employment, and moderate long-term interest rates. Monetary policy boosts or slows economic demand for goods and services (Bernanke, 2017). When general demand slows, unemployment and inflation tend to rise. The policy can help stabilize the economy by increasing demand by lowering interest rates. When demand for products and services is too high, unemployment can decline and inflation can rise. The Fed can lead economic activity back to more sustainable levels and control inflation by raising interest rates.

What I could have improved on the activities I have learned from this course is ensuring that I learn more and I am up to date on the current economic issues. Issues such as the emergency of Covid-19, and the war between Russia and Ukraine have negatively affected the economy across the world. Therefore, I need to be up to date with such current issues.

References

Ashraf B. N. (2020). The economic impact of government interventions during the COVID-19 pandemic: International evidence from financial markets. Journal of behavioral and experimental finance, 27, 100371. Web.

Bernanke, B. S. (2017). Federal Reserve policy in an international context. IMF Economic Review, 65(1), 1-32.

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Impact of Covid-19 on the Economy

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