The COVID-19 pandemic has left the world in complete disarray. Different economies around the world have tackled the COVID-19 pandemic differently, with several monetary and fiscal policies being introduced to combat the devastating effects the pandemic has had on the economy. This chapter focuses on some of the most economically powerful countries and their policies to overcome pandemic-related adversities. More importantly, it gives insights on how COVID-19 is different from earlier crises in terms of its characteristics and also in terms of the uniqueness of the initiatives taken by the major economies in mitigating its impact. The chapter also discusses how the new-age technologies can help manage this crisis better. The study also discusses the implications for the policymakers, the governments, the executioners, and the think tanks or consultants to the decision makers.
TopIntroduction
Economic recessions are an indispensable part of the global business cycles because all the countries get impacted by them (Osinska et al., 2016). But each crisis is different from the earlier ones. Covid-19 started as a biological crisis but transformed into a sociological and economic object of discussion (Ozili, 2020). The earlier financial crisis of 2000 and 2008 have happened due to financial shocks (Jermann and Quadrini, 2012) as compared to the Covid-19 crisis. The IMF (International Monetary Fund) officials have quoted that the economic slowdown caused by the pandemic was the worst since “The Great Depression” in the 1930s.
The crisis of Covid-19 has been very unique as well as very severe and dangerous (Borio, 2020; Sukharev, 2020). This pandemic was an unparalleled shock at the global scale and has caused immense disruption in the interlinked global economy. The supply of goods and services were impacted by the reduced productivity and availability of labor caused by the infections, as well as by the lockdowns, organizational shut-downs, and social distancing norms. The demand has taken a hit with the reduction in incomes and loss of jobs, leading to a reduction in private spending and freezing of investment decisions by the businesses, which worsens the situation further. There was a social as well as economic chaos of the magnitude that has no precedence in history. The virus is causing tragic loss of life, and the lockdown needed to fight it has affected billions of people. As an implication of the complete lockdown, social and economic activities have come to a halt. It is time that the world economies revive and resume their activities to put the development of the country back on track. Almost every government around the world has projected their economy to contract in 2020, despite billions of dollars being pumped into the system by Central governments and Central banks. The impact that Covid-19 has had on different countries has been different, owing to the dynamic nature of the world economy. However, Covid-19 had a significant effect on the economy of all the nations (Sahoo and Ashwani, 2020).
All the nations irrespective of whether they are classified as developed or developing, have suffered and are still at risk. The situation is particularly worrisome in the developing nations with inadequate medical services, and in the highly populated slum areas where social distancing is very difficult to achieve. They are more vulnerable to economic disruptions in demand and supply and have limited financial resources but more debt obligations. International trade has also taken a hit, which impacts the nations that are commodity exporters.
The coronavirus (Covid-19) pandemic affected the GDP of all the global economies. It made all the businesses around the globe go stand still for a moment. But with solidarity and help from each other, all the countries are trying to get back on track to cope up with this pandemic. It has so adversely affected our country's economy that it would take a few years to revive and get back those growth numbers. Therefore it's really important to have full-fledged research on the GDP to predict its trend shortly. It not only helps industries to plan their strategies but also the government to adopt strategies which will help its citizens and in house business houses to strive.
The paper has been structured into eight sections. Section one gives a brief introduction to the topic of discussion. Section 2 discusses how Covid-19 Crisis is different from the earlier crises. Section 3 discusses the control tools in the hands of the government. Section 4 gives a small overview of the need for government intervention by forecasting the Indian GDP growth rates in the absence of the same. Section 5 discusses in detail the approach adopted by the major economies across the World. Section 6 explores the possible directions for the use of new-age technologies in handling the crisis better. Section 7 elaborates the implications of this study for the policy-makers, while Section 8 concludes the paper.