question archive It is about the Impact Of Covid-19 On U
It is about the Impact Of Covid-19 On U
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It is about the Impact Of Covid-19 On U.S. Economy, I did part of the work but I think it is not very well organized, I want you to help me improve it and the paper needs to be 1000 words using the links there, without plagiarism. thank you
https://www.economicshelp.org/blog/1850/economics/difference-between-monetary-and-fiscal-policy/
https://www.weforum.org/agenda/2020/03/economic-impact-covid-19/
Summarize current / potential impact of COVID 19 on US economy from the articles above.
The Impact Of Covid-19 On U.S. Economy
Although the financial crisis of 2008 and COVID 19 are closely related, the impact of covid 19 cannot be compared with these outbreaks, and not even with the financial crisis of 2008. This time it is different, the pandemic is all over the world, it is not concentrated in low- or middle-income countries, interest rates are at historic lows, the world is much more interconnected, supply chains are more important than ever and are being affected, and both supply and demand are restricted simultaneously. According to the economist Michael Walden, the impacts come in 4 forms. These are: Shortages of products from China, reduced sales to China, a drop in consumer spending and the fall in stock prices.
Shortages of products from China. This disease started in China, the world's largest importer and exporter, and for many industries its main supplier of inputs. The US imports over 500 billion dollars of products each year from China. When the pandemic crisis became global, the entire world's economy was affected, factory workers in China could not work and production fell.
Reduced sales to China. China not only reduced its sales to the world but also stopped buying. US companies sell over 100 billion dollars of products like computer chips and soybeans to China. These sectors already took a hit from the trade war of both countries in the last 2 years. Although, the recent limited deal might be short-lived as the virus outbreak impacts the Chinese economy.
A drop in consumer spending. People all over the world put off some purchases on products like appliances, vehicles, cellphones and furniture. What remind us the SARS outbreak in 2003 which caused a decline in consumer spending on those products, just like the impact of Covid-19. However, this leads to two advantages which are, a drop in gas prices, and a reduction in interest rates.
Falling stock prices. If there is something that the pandemic has brought investors is uncertainty, it is not known what may happen in the market. No one knows how bad the outbreak will get and what the impact might be. Prices have been seriously affected, there is a lot of volatility and a sharp fall in the stock market could affect the economy by undermining consumer confidence and reducing their spending. If the stock market tumbles further however, all bets may be off.
It is estimated about 3 years for the United States economy to recover from covid-19. We are in uncharted territory, with a double risk of a financial system shock and an epic freeze of the real economy, the households, firms, and government that deliver real, physical goods and services. Countries do not know how to react to this. Social distancing only increases these problems. For example, a prolonged crisis can drive up real economy bankruptcies of everyday people and firms, making it harder for financial systems to manage. And a financial system crisis would starve the real economy of credit, which could cripple investment and ultimately growth. In this combined crisis, capital does not growth. However, we can reduce the intensity of the crisis mainly with innovation.
For the health area, vaccines, treatments, training for doctors and capacity innovations are needed to save lives and end the economic damage caused by social distancing.
On the economic side, a vigorous and efficient policy response, we will need policy innovations. For example, in the US, the $ 2 trillion stimulus bill. We will need an innovative way to deliver that money to those who really need it, people who were hard hit by the pandemic. Since never before have policymakers had to help such large numbers of firms and households. For example, the so-called discount windows that allow unlimited access to funding for the financial sector could be replicated for households and firms in the real economy so that they can stay afloat. Speedy, well-executed medical and policy and innovations are our best hope to save the most lives and avoid permanent economic damage.
