Question

You’ve also heard me talk about how economists are looking at all sorts of micro indicators – like electricity usage, to get a sense of how bad the situation is (while they wait for the lower-frequency macro data to be collected.) North vs. South Korea are a good indicator of how prosperous they are relative to each other based on satellite images of their night-time electricity usage. (Google it!). What are economists finding out electricity usage during the time of the Pandemic? What’s it telling them? Again, this is investigative on your part – please report what you find, with appropriate citations, of course.

Answer 1

The economic stability of a nation is the major factor that sustains an economy in a long run. There are many factors that influence this stability and the effect of an outbreak or a pandemic is a no lesser one. Once a nation is affected by a pandemic, it affects the local economy in first, national economy in the next stage and the global economy at last. Once that pandemic is a global one, then the effect it has on the global economy is huge and the whole stability of the global economy gets affected, In this lights, it is important for the world economy to analyse each and every macroeconomic data so as to find a way to bring back the economy to its stability.

     

                              In the light of this, the macroeconomic data analysis of electricity consumption across the globe is a good strategy so as to analyse the economic condition of a nation. For example, consider the chaotic situation where we are in today where the whole world is being affected by the Covid 19 pandemic. In the wake of this, based on the analysis of the International Energy Agency [IEA] on the electricity consumption patterns during the epidemic, the following conclusions and statistics have been obtained

· With most of the people of the world being confined to their homes, it has proved how much the modern society rely on electricity.

· Although many of the sectors of the economy like industrial practices have been shut down, many other sectors like home use, usages of electricity for ventilator needs and hospital usages have seen a huge rise.

· The IEA statistics reveals that despite of this huge rise in the usage, the overall usage of electricity has fallen by about 15% across the globe since most of the industrial processes and business activities have been shut down.

· With abrupt slowdown of many processes, the process of maintaining a balance between demand and supply in electricity has become crucial and challenging at the same time.

· The power usage patterns have also changed globally. Before the world was confined to homes, early mornings and evenings had seen a huge rise in variable demand patterns as the homes would be active after office hours. But now the patterns have changed on a large scale.

· Studies suggests that overall electricity consumption have fallen by 2% in New York and between 2.5% and 7% in California.

· The analysis has concluded that during a pandemic, the consumption of electrical energy is no longer the monopoly of huge firms and processes, but it has been confined to homes and hospitals on a large scale.

                                              Thus, based on the analysis of the IEA and other statistics, it can be seen that the analysis of electrical energy usage is a better indicator of how an economy works and how the sector can be undertaken so that the economic stability of a nation ids not lost, as energy sector, especially electricity forms a major contributor to all the economies of the globe.