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The Influence of COVID-19 on the Modern Economy Essay

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Updated: Feb 16th, 2022

The article exhaustively describes the impact that the pandemic is putting on the whole world now. It is stated that Covid-19 has almost halted economies, but due to some crucial efforts of governments, the absolute global financial catastrophe is averted. The piece of news collects the facts from markets worldwide and provides quite a coherent and consistent arguing regarding what the current situation may cause in the future.

The news contains a number of notable facts and assumptions that might seem essential to be emphasized. First, the statement regarding the similarity of the economic situation by March 2020 to the crisis of 2008 is quite concerning. Tooze (2020) claims, “global financial markets came as close to a collapse as they have since September 2008.” The world is still on its way to overcoming the consequences of the crisis that took place in 2008, and the current dire conditions might severely affect the global economy to even a greater extent.

The following highlight in the article is related to the role that credits play in the process of averting a full-scale meltdown. According to Tooze (2020), “The bits of the economy that do continue to function – the warehouses, the mobile phone providers and internet firms – all need credit.” In order to be able to get through the economic lockdown, plenty of families and companies are counting on a loan from states. However, it should be mentioned that these states are too in the necessity of credit because of reduced tax revenues. It is stated that the world is facing the most massive rise in deficits and governmental debts since World War 2 (Tooze 2020). At this point, the primary takeaway is that credits may be defined as an engine that drives the world economy. Nevertheless, when the optimistic promise of growth is missing, then, contracting credit occurs due to crumpling confidence. Such circumstances might destroy a lot of vital components of the international financial system.

The noticeable assumption that is founded on the facts provided by the article refers to the phenomenon of globalization. It seems visible from the described situation – the actions that were taken by countries, as well as the current conditions, are quite intersected and interdepended. Tooze (2020) discusses the news around the oil market, projections for developed and developing countries, and the most critical decisions of officials – it might be supposed that one comes from the other. This is the main characteristic of globalization – global affairs and relations have a significant extent of density and depth, delegating plenty of authorities and capabilities to international organizations and institutions. Tooze (2020) emphasizes the fact that there is a high dependency on such establishments as Fed or International Monetary Fund, as well as on the European Central Bank. If such organizations do not take any substantial actions regarding the help to countries with non-advanced economies, the global financial system will be halted sooner or later.

To conclude, the influence of Covid-19 is characterized by drastic results for the modern economy. The summarized article demonstrates quite a logical and reasonable train of thought with notable and convincing arguments. It was assumed that the most prominent takeaways might be the similarity of the contemporary conditions to the crisis of 2008, as well as that credits are the main tool to prevent an unrecoverable downfall. Furthermore, it was presumed that the article contains evidence that the modern economy is subject to the irreversible effects of globalization.

References

Tooze, Adam. 2020. “Guardian, 2020. Web.

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IvyPanda. (2022, February 16). The Influence of COVID-19 on the Modern Economy. https://ivypanda.com/essays/the-influence-of-covid-19-on-the-modern-economy/

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IvyPanda. (2022, February 16). The Influence of COVID-19 on the Modern Economy. Retrieved from https://ivypanda.com/essays/the-influence-of-covid-19-on-the-modern-economy/

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"The Influence of COVID-19 on the Modern Economy." IvyPanda, 16 Feb. 2022, ivypanda.com/essays/the-influence-of-covid-19-on-the-modern-economy/.

1. IvyPanda. "The Influence of COVID-19 on the Modern Economy." February 16, 2022. https://ivypanda.com/essays/the-influence-of-covid-19-on-the-modern-economy/.


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IvyPanda. "The Influence of COVID-19 on the Modern Economy." February 16, 2022. https://ivypanda.com/essays/the-influence-of-covid-19-on-the-modern-economy/.

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IvyPanda. 2022. "The Influence of COVID-19 on the Modern Economy." February 16, 2022. https://ivypanda.com/essays/the-influence-of-covid-19-on-the-modern-economy/.

References

IvyPanda. (2022) 'The Influence of COVID-19 on the Modern Economy'. 16 February.

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