Question

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Write the Impacts of the COVID-19 Shocks in New Zealand (~600 words)

Use economic models and theories covered in this course (e.g. AD-AS model, neoclassical growth model, etc) to explain how the pandemic affects the demand and supply side of the economy.

TIP: ⮚ You could discuss how the government’s non-economic responses to the pandemic (e.g. social distancing, closing the borders) and how it affects the economy.

⮚ You could contrast the economic effects of different shocks (COVID-19 vs GFC/Brexit) by comparing the growth rate of different indicators (growth, GDP growth, unemployment, etc) at the ‘peak’ of the crisis.

Answer 1

Impacts of the COVID-19 Shocks in New Zealand :

New Zealand’s coronavirus lockdown, with all non-essential businesses shut, will hurt the economy more than the GFC, the finance minister warned.

New Zealand’s finance minister has warned the nation is facing an economic shock “a quantum greater” than that of the 2008 global financial crisis, with jobless numbers likely to exceed those at the time of the down.

“GDP is going to take a serious hit, as will unemployment,” Grant Robertson told a parliamentary committee set up to scrutinise his government’s actions on the Covid-19 pandemic on Wednesday. He added that he could not yet provide specific forecasts for either measure, which he said were being finalised by the Treasury.

New Zealand is nearly a week into a national lockdown that has seen all non-essential businesses shut and almost every New Zealander ordered to stay in their homes unless they are buying groceries or seeking medical help. The lockdown is expected to last at least one month.

World Health Organization (WHO) has declared a public health emergency of international concern to coordinate international responses to the disease. It is, however, currently debated whether COVID-19 could potentially escalate to a global pandemic.

A total of 708 people in the country have Covid-19, an increase of 61 confirmed and probable cases on Wednesday. Fourteen people were in hospital with the virus, two of them in stable condition in intensive care. One person has died.

Non-economic responses to the pandemic:

The WHO recognised the spread of COVID-19 as a pandemic on 11 March 2020 as Italy, Iran, South Korea, and Japan reported increasing numbers of cases. Later that month, the number of cases outside of China quickly surpassed the number of cases inside China.

Across the 14 countries surveyed, a median of 73% say that their own country has done a good job dealing with the coronavirus outbreak. Just 27% believe their country has handled it poorly. However, there is some variation by country on this assessment.

About seven-in-ten or more give their nation’s coronavirus response a positive review in Denmark, Australia, Canada, Germany, the Netherlands, South Korea, Italy and Sweden. And more than half in Belgium, France, Japan and Spain share this sentiment.

In two countries – the United Kingdom and the United States – people are divided in their beliefs when it comes to rating their government’s performance responding to the coronavirus.

This divergence is especially pronounced in the United States. Among those with a more optimistic view of the economy, 78% report that they approve of the way the U.S. government has dealt with the virus. But those who think the American economy is currently in poor shape are less than half as likely to give the government response a positive rating.

COVID-19 vs GFC/Brexit:

Covid‐19 pandemic has seen most governments worldwide having to think on their feet rather than implementing detailed and well‐rehearsed plans. This is notwithstanding the fact that a pandemic was bound to happen, sooner or later (and will happen again). The effectiveness of national responses has varied enormously. Globally, New Zealand has been perceived as setting the gold standard in ‘curve crushing’, and for a short period achieved Covid‐free status. For this achievement, much credit is due to the New Zealand government, especially to Prime Minister, Jacinda Ardern. However, post‐lockdown the New Zealand government has encountered a number of Covid policy implementation problems (many of which could have been anticipated). Nevertheless, Covid‐19 might still turn out to have been a shock to existing policy processes and policy frames such as austerity. If so, there are grounds for hope that in the future, governments and voters might be less short‐term in their outlook.

Hence the Difference of this Pandemic is Stay Home and Stay safe by wearing a mask.If Government has given a order of supplying the daily needs to the people living in particular country it will make that people will not get affected by global corona virus.If this gets executed we can get reduced the affected rate upto 75%.

These are the Impacts of the COVID-19 and non - economic responses Shocks in New Zealand.