Question

"Insofar as the world economy was already on a fragile, unsustainable path, COVID-19 clarifies the challenges we face and the decisions we must make. The global economy will be shaped in the years ahead by three trends. The relationship between markets and the state will be rebalanced, in favor of the latter. This will be accompanied by a rebalancing between hyper-globalization and national autonomy, also in favor of the latter. And our ambitions for economic growth will need to be scaled down."

1) Which growth model will developing countries have to choose after Covid-19 pandemic? Which growth theory will be the most explanatory to this model? Explain.

2) How will the role of the state and globalization be affected after the pandemic? Explain.

3) How will international trade exist in the global economic order to emerge?

Answer 1

Answer. 1)

Developing countries will choose Harrod–Domar Model for the will choose after Covid-19 pandemic. The Harrod–Domar version is a Keynesian model of financial growth. it is utilized in development economics to explain an economic system's increase price in phrases of the extent of saving and of capital. It indicates that there is no natural purpose for an financial system to have balanced increase. The version became advanced independently by using Roy F. Harrod in 1939, and Evsey Domar in 1946, despite the fact that a similar model were proposed via Gustav Cassel in 1924. The Harrod–Domar model become the precursor to the exogenous growth model. A line with the Harrod–Domar version there are three sorts of boom: warranted increase, real boom and natural price of boom. Warranted boom price is the charge of boom at which the economy does not enlarge indefinitely or pass into recession. Actual increase is the real fee boom in a rustic's GDP in step with year. Natural growth is the increase an economy requires to keep complete employment. for example, If the hard work pressure grows at three percent per year, then to maintain full employment, the financial system’s annual increase charge must be three percentage.

The most explanatory theory to this model is Endogenous growth theory which increase theory holds that economic boom is usually the end result of endogenous and not external forces. Endogenous boom principle holds that investment in human capital, innovation, and understanding are enormous participants to monetary boom. The idea additionally makes a speciality of effective externalities and spill over consequences of a know-how-based economy in an effort to cause financial development. The endogenous growth concept usually holds that the longer term boom price of an economic system depends on coverage measures. as an instance, subsidies for research and development or schooling growth the boom rate in a few endogenous increase models by way of increasing the motivation for innovation.

Answer. 2)

The state and globalization will be The COVID-19 pandemic has spawned new barriers at breathtaking velocity. Closed borders, tour bans, paralyzed deliver chains, and export restrictions have brought about many to invite whether or not globalization itself may fall sufferer to the coronavirus. In truth, globalization became already in decline nicely earlier than the outbreak, having reached its height before the 2008 international economic crisis and having by no means recovered because then. The pandemic will without a doubt highlight the dangers inherent in overdependence on global deliver chains, activate a renationalization of production, and put pressure at the belief of global interdependence. The probably end result is an acceleration of adjustments which have long been in movement toward a brand new, unique, and greater restricted form of globalization.

We identified additional findings from our research. First, the marketplace-main companies in our have a look at - which had sturdy reserves to weather the typhoon - actively invested within the brief time period with the only consciousness of extending their lengthy-time period advantage over less endowed competition. The leaders of those companies replied to tough times now not by way of keeping sources, however by way of investing their reserves in strengthening their corporations' aggressive role within the market.

Our 2nd finding is that these firms have been aggressively dashing up and expanding their digitization strategies, and enforcing structures to make certain that new competencies, practices, and behaviors are integrated into their company's muscle reminiscence. They in addition recognized that large field may be required to make certain that employees now not revert again to pre-crisis behavior.

Answer.3)

He global monetary panorama has undergone profound adjustments because the end of the bloodless warfare. After the global monetary disaster, the arena economic system entered a “new everyday,” and there are mounting challenges that want to be controlled. Lamentably, the global governance machine has not kept pace with the dimensions and complexity of those challenges. The brand new global financial Order (NIEO) represents an alternative worldview of the global political economic system to emerge in the course of the Seventies. extra specially, this worldview covered a reconsideration of existing relationships, systems, and techniques that were dominant within the global political economic system of that point, and advocated for the well-known integration of classical liberalism inside the international economy.

Indeed, every little bit of trade in the global economic order includes the redistribution of international responsibility as well as worldwide energy. Emerging powers, together with China, ought to encourage a angle that tolerates improvement the world over. Cultivation of the sort of middle fee will assist rising powers adopt international obligations proportionate to their modern-day country wide energy and ancient stricken by colonialism, and save you them from being depended on with duties and duties beyond their capability. At the identical time, such an mindset toward the improvement of other nations will also demand that evolved international locations undertake their duties, fulfill their commitments, and pay greater attention to the affordable demands of less-advanced nations. This will simply have a worldwide effect and could translate into a more inclusive international monetary order inside the close to future.