Question

In: Economics

Topic: The impact of COVID-19 in our Economy. 1) Will Monetary Policy and Fiscal Policy be...

Topic: The impact of COVID-19 in our Economy.

1) Will Monetary Policy and Fiscal Policy be enough?

2) Who truly failed from all of these massive interventions in a ‘Free Capitalistic Economy’?

3) Where are all the outcries from those politicians who believed in the adage of “only the fit shall survive” or “we believe in free markets void of Economic Intervention”? Will these interventions succeed? Will we need more intervention?

Solutions

Expert Solution

1. A combination of monetary as well as fiscal measure policy will be needed to cure the economy from the collateral damage from the massive loss of the spread of coronavirus disease. On the monetary front, maintain liquidity regime as well as financial stability in financial markets through measures are required. For the liquidity the government must incentivise the digital payments to reduce the currency liquidity risk. These interventions are needed by government intervention in key areas of economy. In short, we must act quickly to solve emerging problems. But governments must act in a way that does not pose a long-term moral threat to the economy. This is when economic agents, especially banks, become reckless, hopefully governments will always defend themselves. In situation of break demand and supply chain require the government support as well as the monetary policy measure.

More than ever, the lessons of this epidemic include building effective and efficient public institutions, development of health and education infrastructure, and effective research to support innovation for sustainable economic growth. In particular the digital economy: telemedicine, genomics, AdTech, fintech, e-cloud, etc. - will be the main beneficiaries of this epidemic. However, these technologies need support, such as investment in infrastructure and broadband connectivity, for which governments remain important facilitators and regulators. Which are include in fiscal investment to boost the economy. Therefore, both the monetary and well as fiscal policy are required on upfront to deal with demand and supply gaps, liquidity issue in the time of pandemic under the condition of self-care of an individual with its own as well as social responsibility.

2. In the United States and all other developed countries, the disease is characterized by confusion and lack of coordination with lack of preparedness. All the developed nation the capitalist, with best health services are at huge risk and far behind the race to control the covid 19. The United States, the world's richest country, the most technologically and scientifically advanced, home to Silicon Valley and the world's most famous universities, cannot at least test what allows it to administer an epidemic. During the last decade, all economic and political life has developed towards a sudden redistribution of wealth. But to solve all major social problems, from epidemics to climate change, financial resources are needed to meet social needs. And therefore, these capitalist nations dallied to achieve the success on corona virus outbreak.

3. Free market operate situation where economy clears itself in long run after adjustment. But in case of pandemic there is disruptions on the market as well as the public side, demand as well as the supply has been affected. Where production has reduced for short period due to the lockdown. And the demand affected for certain goods and services.so, the outcries of politicians who earlier believing in the free market operation ended as their thought of market intervention and policies has failed in the pandemic situation where nor single policy been affective. Daily doses of rules and regulation policy changed gone daily new version and doses. Free market operation and movement led tis problem aggravated the pandemic situation.

these government intervation might be sucessful if combiation of policy will be used to overcome the demand as well as supply side, market as well as public side.public policy must be at the centre of these policy and the economy must be back on the pace.


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