Question

small mistakes are the stepping stones to large failures. How might this saying apply to ECONOMICS, and do you agree? In your responses, provide an example of a real-life seemingly small mistake with large consequences. By real-life, I mean a situation that actually happened, not a theoretical one.

Answer 1

The maxim"small mistakes are the stepping stones to large failures" is very much true as far as the world economy is concerned.COVID-19 outbreak is the latest example in this regard. The pandemic outbreak started in a very small region of Wuhan in China but now it spreads all across the globe. Economists have differing opinions about the measures to handle the pandemic. Some are very much favorable for a complete lockdown of all businesses except essentials. They believed that saving lives should be the first priority than running businesses. they believed that businesses could be taken back to track soon through some economical measures even though they are closed for some days. They considered it as a health emergency that does have long term economic consequences if some short term measures including lockdown are not taken. But another category of economists believed that COVID-19 is basically a medical emergency and healthcare workers should take care of it and economists need not do anything about it. They were completely against lockdown and such restrictive measures suggested by medical experts.

Facts prove that the opinion of the first category of economists was right as the countries favorable for a normal life were the biggest victims of the pandemic than the countries gone for lockdown initially. So we shall conclude that small economic mistakes during COVID-19 may take the whole world economy to stand still and may have long term consequences including a financial recession.