The effects of coronavirus pandemic on world economy : What did this COVID -19 bring to the global economy instead of progression?
- Stagnation ( L,U,V curve on economics type): It defines that a prolonged period of little or no growth in an economy . Besides, if the economic growth is 2 percent or 3 percent annually, it considered stagnation. However, it highlighted that a high unemployment rate and involuntary part time employment .
- Recession(2008-09): The term recession represents a sharp decline economic activity . In that time , GDP declines more than 10 percent and unemployment increases more than 50 percent .
- Depression(1978-80): It is more severe than recession . Depression is long term, sustained downturn in economic activity. Some common forms of depression are price deflation, financial crisis , stock market crash and bank failures. These are not occurred during recession.
- The great depression(1929-33): It represent a severe economic depression in the worldwide. After the major fall in stock exchange in USA, the great depression started. Besides, it had devastating effects on both rich and poor countries. In short, International trade fall down more than 50percent and personal income , tax, revenues and prices dropped at once.
At the end of the Corona virus, the economists can tell which of the four conditions the global economic system will have. Let’s take a look-
Under the influence of Corona virus, there are some winners, loser and in between industries.
Winner industries are –
- Ecommerce industries ( Amazon)
- Entertainment( Netflix)
- Courier services/ logistics &delivery
- Live steaming and gaming industries(Pub-g)
- Video conferencing sites (skype)
- Social sites (facebook, youtube, instagram )
- Pharmaceutical industries
- Artificial Intelligence Based industry
Above mentioned business organizations are never before have seen such growth. That’s why they are called winner industry.
There are some loser industries under the effects of COVID-19. Let’s see-
- Investment banking
- Airlines cruise travel
- Economy and share market
- Oil &gas
- Retail business
- Employment services
- Professional sports events
- Hotel services
- Hospitality services
- Cinema industries(Hollywood , bollywood)
Under the influence of Corona virus, these all commercial industries have gained negative impacts. Besides, It will take a long time for their business to return to normal . However, in the language of economics, it is called loser industries.
Some in between industries are –
- Health care services
During Corona virus outbreaks, these industries are not loser or winner. They are in the middle position in the business. So , in the language of economics , they are called in between industries.
So where is the solution?
All the previous global economic collapse had a good system.
- New deal system (1933): The new deal system was designed to help united states economy emerge from the great depression. It was a government directed projects set forth by the federal government under President Franklin Delano Roosevelt. However, it was meant to bolster the united states economy , reduce unemployment , ensure social safety and build confidence in government’s ability to protect it’s citizens.
- Deregulation system (1980): It is the process of removing or reducing state regulations.
The first of these two measures is ineffective for the current economy. And the second measure increases the rich-poor ratio. It called Gini coefficient. It remains to be seen what’s World Bank/IMF/ Washington consensus will take to fix the global economic condition. However, it is difficult to say directly if any action is taken, the world economy will return to normal.
- The effects of COVID-19 on world economy
- Winner industry
- Loser industry
- In between industry