Paper on the Economics of Managers

 

ECONOMICS FOR MANAGERS

Executive Summary

The economy is a fundamental facet of the general well-being of the financial strength of individuals, families, countries, and the world. The economy is rooted in the various small-scale and large-scale activities that generate income.  The income-generating activities could range from trade, education, business enterprises, art innovations, healthcare innovations, sports, tourism, mining, transportation, and many others. All the above activities can be performed locally, regionally, or intercontinental. One common thing them all is the interaction between people of different locations and countries.

All the public sectors interrelate with each other, meaning that blockage of one of the elements affects the functioning of the rest. The introduction of the COVID-19 pandemic to the world has been one chief drawback to the global economy since 2020. The reverse movement of the economy has proceeded at an alarming rate, considering World Health Organization policies. For instance, the lockdowns and closure of significant business activities directly diminish the global economy. While the restrictions were at the forefront of fighting the COVID-19 pandemic, on the other hand, there was a decline in economic growth both locally and internationally.

Good health status and a progressing economy are two irreplaceable elements. But eh achievement of one seems to create an unintended cover on the importance of the other. As a result, it has presented a policy dilemma that cuts between maintenance of public health and safeguarding the roots and branches of the economy. The restrictions over public services have brought about a colossal decline the revenue generation, which left the world more impoverished and vulnerable to intense global poverty.

Healthcare sector resolutions can move a long way in establishing future misfortunes-oriented goals. Given that pandemics are uninvited guests with extra costly needs, it is valuable to be observant by fore-planning for these unpredictable events. Technological knowledge is essential, especially during communication, because it ensures that policies are based on an informed perspective. For uninterrupted resilient supply chains by the lockdowns and movement limitations, the authorities should repurpose the existing production capacities to focus on local emergency needs fulfillment.

Introduction

The main interest of economics managers is micro and macroeconomics and the surrounding issues. The managers have put effort into applying economic theories and principles to get to the bottom of business issues and make informed decisions. They are essentially critical in having an internal comprehension of the entire business issue before making a decision. Microeconomic refers to a branch of economics that focuses on the individual decision-making units, such as consumers, firms, and their interaction within the economy market. On the other hand, macroeconomics is a branch of economics whose interest lies in large-scale or general economic facets such as interest rates and national productivity. When managers understand the two major subsets of economics, they can analyze, predict and respond to a negatively deviated economic environment. They can manage unemployment, inflation, and the effect of monetary policy. They can also determine which companies and organizations’ services are  retained in the market and choose their price charges.

The Australian Economic Climate

In the recent past, the Australian economy has been challenged and seemingly has become limited due to Q2’s record GDP decline that extended to a poor business position in the market (Maritz et al., 2020). The exports had a marked drop, especially in the private sector, and this, coupled with the alleviated market, brought a ground-shaking negative effect to the overall economy. The lockdowns that came with the COVID-19 pandemic hit also contribute in the backward progress of the Australian economy (Maritz et al., 2020).

 

 

Fig 1: https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.globaltimes.cn%2Fcontent%2F1199717.shtml&psig=AOvVaw1W-4_pRp9IhFT02NlyRBpn&ust=1621249118563000&source=images&cd=vfe&ved=2ahUKEwi4lNrfhc7wAhVNQRoKHUgKCJsQr4kDegUIARD8AQ

Fig 2: https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.focus-economics.com%2Fcountries%2Faustralia%2Fnews%2Fgdp%2Fgrowth-surpasses-expectations-in-q4-2019-but-full-year-growth-falls-to&psig=AOvVaw1W-4_pRp9IhFT02NlyRBpn&ust=1621249118563000&source=images&cd=vfe&ved=2ahUKEwi4lNrfhc7wAhVNQRoKHUgKCJsQr4kDegUIARDDAQ

 

1. Microeconomic Contemporary Economic Analysis

An overview of the COVID-19 Pandemic on Global Economy

Within the year 2020, the world woke up to a shock following the striking of COVID-19 pandemic. As new as it was in the world, it brought in massive tension especially considering the rate at which fatalities were clearing people. China, the epicenter of the pandemic, became the first victim country that faced the virus as original as it was. No form of prevention was available by the time coronavirus disease outbreak was felt by the world. With the lack of clear evidence yet about the transmission of the virus, every public gathering had to be closed, including but not limited to schools, churches, markets, sports, public transportation, political rallies, and other business gatherings. Movements were ceased, crowding and contact at large. The world came to a standstill for a while between 11th March 2020 and the subsequent 5-7 months of the year, with different countries locking their country’s activities differently (Ibn-Mohammed et al., 2021). The disease contraction was alarming, and deaths had started to become profoundly shocking to the world. Sourcing from Wuhan, China, the spread was so rapid getting to Japan, S. Korea, Europe, and the United States of America regions. After announcing the disease as a global pandemic, the World Health Organization (WHO) placed strict health protocols to prevent the public from succumbing to the raging virus (Ibn-Mohammed et al., 2021).

The public readily embraced healthcare measures, but a significant proportion of public and private employees lost their jobs. Following the stillness of businesses, the economy took a negative deviation, which translated to a life change. The poor became more impoverished, the vulnerable non-poor became poor, and life needs became more unmanageable (Ibn-Mohammed et al., 2021).  The general livelihood of the public was highly interrupted because people could not worship as they did before, and the physical interaction between relatives, friends, business partners, countries, continents were dropped at an instant glance. Of importance is that these interactions had an economic significance. The Supply of goods and services was continuously propagated, which was a way of generating wealth locally, regionally, and internationally (Ibn-Mohammed et al., 2021). Vast sums of resources to were utilized settle health issues. The government could have used the resources for other economically beneficial ways. The global health problem is gradually taking the universal economy to a static and dangerous zone.

The blooming economic shock is still exponential, and its effect is felt across the world in the supply chains and financial markets.

 

COVID-19 Impacts on Microeconomic Activities (Consumer Behavior)

There have been regular records of mismatches between consumer inclinations and the presentation of the biophysical environment. With the emergence of COVID-19, the situation has been furthered (Ibn-Mohammed et al., 2021). Consumers have been reluctant when purchasing food and sanitary items. The restrictions in obtaining these items have led consumers to revise their needs where they tend to drop the exaggeration of their needs and focus on the fundamentals.  Besides, the emergence of technological products like phones with an average span of 4 years means that some technical repair is needed to fix the problems (Ibn-Mohammed et al., 2021). However, the lockdowns that restrict movements block access to these services.

Conversely, COVID-19 has invigorated the research and development sectors to invent more short-term products and drop the long-term production. With COVID-19, it is revealed that lockdowns are placed according to the severity of the disease. Production of long-term services can be linked to future losses if consumers change preferences or are unable to purchase them due to lockdown.

COVID-19 Impact on the Aviation Sector

One of the public sectors that have been severely affected by the current pandemic is transportation. Considering the level of restrictions in mobility, the sector is struggling with human traffic deficit. All passengers ferrying transport means including air, dry land, and water transport, have to meet COVID-19 management measures that include social distancing. Social distancing means fewer people per trip. However, vehicles were at a better fate because the shutdown was not complete, and the stations could shift from highly populated areas to those with low population. Due to international interactions, the aviation sector was also halted to zero frequencies of transport, and therefore, all revenues accrued by air transport recorded a huge drop (Ibn-Mohammed et al., 2021). In air transport, the effect was too much. Since airports are not easy to establish and maintain, few airports could still support air transport as was required by the World Health Organization mandates (Ibn-Mohammed et al., 2021). There was a decline in revenue by approximately 39%-56% seats during scenario 1- (late May), corresponding to 872-1303 million passengers, summing up to  $152-$231 billion. In scenario 2(3rd quarter and later), an overall drop of approximately 49%-72% corresponded to 1124-1540 million passengers, summing up to between $198 and $273 billion. The prevalent assumption is that passengers’ flight confidence had gone down, making them remain in their countries (Ibn-Mohammed et al., 2021).

COVID-19 Impact on Tourism Industry

When flights are halted, automatically, all industries that are associated with the aviation sector are affected. The tourism industry is one sector that almost entirely depends on air transport. For example, United Nations World Tourism Organization (UNWTO) revealed a fall in global tourism receipts of about 22%, worth $80 billion as of the year2020. Prolonged travel restrictions and border closures could lead to a universal economic recession (Ibn-Mohammed et al., 2021). The tourism sector in general is almost entirely losing its contribution to global GDP, and consequently, countries that rely on the sector revenue may face an economic deficit (Ibn-Mohammed et al., 2021).

Theoretical Concepts of the Article

The article is intensely based on facts than theoretical concepts. Since the major topic of discussion to provide an account of the endangered global economy backbone due to 2020 events, the article fundamentally discusses microeconomics and macroeconomics and the overall effect of COVID-19 on the intercontinental economy. Currently, we are living with the COVID-19 pandemic (Ibn-Mohammed et al., 2021). The world is in a better position to cope with the transmission of the pandemic now that there is a discovery of functional vaccines against the virus. According to the look of things, the global economy might pick up if immunity against the virus is achieved across the world; hence the world will be open for all economic activities.

Policy Issues

With the emergence of the pandemic, people have died from it, but all other aspects of the human way of life have bowed to it. Similarly, policymakers and the public sector have encountered one of the hardest times (Ibn-Mohammed et al., 2021). Considering how unmanageable livelihoods have become a daily talk, health crisis, economic downfall, social and political activities were also halted, getting people through a strange and disturbing status quo acceptance. Policymaking is faced with uncertainties because they do not have the truth a hundredfold about COVID-19’s next move across the world (Ibn-Mohammed et al., 2021).

While countries are about to open their restricted activities and cut movement restrictions, they are not particularly sure if the societal model is actually going to work even soon. Economic-wise, the world has experienced a loud downturn that affects both the developing and the developed countries (Ibn-Mohammed et al., 2021). Policymakers have a stiff time evaluating which policy model fits best in the current situation. In the light of COVID-19 global impact, we are introduced to more digitalization than ever before. Having all public gatherings under strict health protocols, people sought to run to the digital way of working and activities, including holding church services, classes, business meetings (Ibn-Mohammed et al., 2021). Zoom and Google meet have become very popular for different audio-visual communication purposes. A high level of digitalization presents a dilemma in what policymakers would want to consider before placing any public ruling.

Article Critique

Introduction

The article, “A critical analysis of the impacts of COVID-19 on the global economy impact, and ecosystems, and opportunities for circular economy strategies,” is a collection of thoughts concerning the implications of the current global pandemic on the economy and the surrounding issues. The presentation of the arguments are well organized, detailed, and concise.  The article takes us through the global economic journey, pre and during COVID-19. The authors specifically shed light on the global economy in macroeconomics and microeconomics concerning how they have been affected during the COVID-19’S era. The portion of the paper will focus on the main ideas of the article according to their presentation.

The authors provide a thorough introduction of their work that offers a guide to the reader in preparation for the central concept. Through the introductory paragraph, the readers raise their curiosity to know what follows in finer details. In their research study, the authors adopt a literal search that provides a base for solution establishment. The literal investigation involved a critical evaluation of various articles’ content regarding their relevance to the study topic.

Secondly, readers are introduced to ground information of other historical events, which impacts the knowledge in terms of transmission rate, geographic spread, and latency (Ibn-Mohammed et al., 2021). The author’s ideas communication ability is portrayed in first laying foundation from where additional information is placed.

Under the impact of the COVID-19 on various public sectors, the authors provide a specific magnitude of its effect by reinforcing their argument with actual figures. The use of figures to represent detailed information is an appealing way of idea expression. The readers can derive the credibility of the information presented by seeing the statistical representation (Ibn-Mohammed et al., 2021). However, the information presented reveals some form of confusion. As the world cries because how terribly the local and global economy has drifted, it is in a way to cerebrate environmental conservation.

It is well known that the world struggles with managing pollution in the environment because it causes global warming, among many other hazardous effects. Global warming poses a dangerous risk on the planet because it can introduce a new horrible pandemic. With the cessation of movements, it is predictable the exhaust emission, and fossil fuels’ contribution to the environment is to some degree alleviated, which is a good contribution (Ibn-Mohammed et al., 2021).  The same COVID-19 era has led people into living more digitalized lives than ever before while avoiding personal contact. At the same time, research and development have become more intense, especially in companies with significant global productivity-to help them with short-term product production information. It would serve better if the authors dealt with the global negatives of COVID-19 in one collection of idea and then attend to the other side of it in a separate group.

The article’s information is thoroughly established, and it presents a perfect site for research and referencing from a detailed viewpoint. The arrangement of arguments in the report is orderly and easy to follow, and thus it requires less work in searching for a particular discussion of thoughts. The scope of the article fits any research concerning COVID-19 global impact, both positive and negative implications.

 

 

 

2. International Macroeconomic Case Study

Introduction

The COVID-19 pandemic introduced a policy dilemma to the policymakers due to the fact that public lives need to be protected from its fierce transmission.  Public safety simultaneously bred economic downturns. As the world was doing, the Australian government enacted restrictions across Australian borders in the attempt to prevent more transmission of SARS-CoV-2, a short period before the World Health Organization (WHO) announced it as an international public health threat (Higginson et al., 2020).   Due to previous influenza pandemic within the country, the healthcare organization responsible during those days had devised strategies that could be applied to fight against any pandemic. With time, those healthcare protocols of those days have been revised until they have been referenced for the management of the Coronavirus.

However, the Australian Health Sector Emergency Response Plan for COVID-19 strictly dealt with the health sector and its authorities. The organization paid less attention to the effects that the healthcare regulations caused to the economy altogether (Higginson et al., 2020).  Public policy changes have during the COVID-19 era have been revealed to have an unintended inclination towards public health safety than to economic progress. The impacts of Australian government mitigation rules against COVID-19 spread, call for reconsideration to pave the way for the creation of future policies that coordinate with economic planning.

 

 

The Policy Dilemma

Public Safety Healthcare Protocols and Economy

Following the declaration of COVID-19 as a public health challenge, everywhere in the world had to be responsive to the terms and policies that WHO put in place. In Australia, the response to the disease began toward the end of January 2020. More biosecurity measures were put in place, especially to shun mobility of both goods and people, followed by territory restriction measures. The border movement restrictions prevented all movements, particularly by vehicles, with few preclusions, such as airline crews, permanent residents, and the individuals who were subject to quarantine procedures. About 86% of Australian citizens adjusted to home-based work. Overall results were recorded in comparison to the public compliance with the health protocols.

 

 

Fig.3:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7452864/figure/fig0002/?report=objectonly

Concerning COVID-19 pandemic management, compliance with healthcare policies came in handy. As a result, the spread of the disease was alleviated to a lower rate. Fatalities that stem from the disease also recorded a significant drop implying that public health status was promising. On the other hand, the economy of the country was deteriorating, taking a negative deviation because the cessation of movements meant that many businesses were deliberately shut down. Public actions beings restricted came along with needs preferences. The Australian economy was left in a delicate and vulnerable economic position that eventually led to an economic plummet.

The Australian government made efforts to ensure that the economy of the country does not entirely collapse by loosening the lockdown measures to specific sectors that generate revenue in a large-scale.  The sectors include building and construction that holds the largest number of employees, and mining industry holds the country’s largest exports.

Stopping Contagion or Protecting the Economy

Right from the entry of the COVID-19 pandemic, authorities across the world were faced by the chief hard-choice situation. The governments were torn between introducing curtailment measures (people’s mobility, economic and social activities in the attempt to diminish the disease’s opportune chances to spread) and saving the economy (Marek et al., 2020). During the young days of the pandemic, some countries across the world put soft cutbacks, such as Taiwan, Japan, Sweden, and Finland, while others were so strict on the protective measures, such as China, India, Peru, Philippines, Italy, France, and Colombia. In the first half of 2020, the level of containment measures varied across the countries depending on the seriousness of the disease within the borders.

Fig. 4: Lockdown stringency (0-100), an average of the H1 2020. https://www.imf.org/~/media/Files/Publications/WEO/2020/October/English/data/WEOOctober-2020Ch2.ashx?la=en

Surprisingly, some of the proposed COVID-19 containment measures, such as lockdowns, have not worked as expected. The prevalence of the pandemic did not indicate a positive turn following lockdowns. The virus is everywhere, and as it is revealing, it is a long-term event that disappoints the world’s expectations. During lockdowns, huge economic costs have been felt, and according to research, there is an association between lockdowns and losses (Marek et al., 2020).

 

 

Fig.5: GDP forecast error and lockdown stringency (0-100), H1 2020. https://www.imf.org/~/media/Files/Publications/WEO/2020/October/English/data/WEOOctober-2020Ch2.ashx?la=en

Besides, there are acceptable limits of economic losses in every given economy. Apparently, the limit is lower in underdeveloped economies than it appears in economically established countries. In that consideration, it sounds dramatic to try safeguarding people from the pandemic and promising them a low living standard (Marek et al., 2020). However, the economically thrived countries have also had a challenging macroeconomic locus.

Whom to Rescue – Enterprises or Individuals?

The lockdowns and the pandemic-related disbelief left the government with no option than to provide financial aids and grants to people and businesses. These forms of compensation varied in different countries and considering the local preferences (Marek et al., 2020). Deciding between aiding people directly or indirectly, by boosting their investments was hard to think through (Marek et al., 2020). The idea of offering monetary aid to companies that operate within the most affected sectors was put to the test. In that approach, exemptions such as tax payments, offering of particular loans, forgiveness, and temporary suspension of tax obligations were applied.

Recommendations

Economic plummets have been there since time immemorial, and therefore it is not limited to the COVID-19 pandemic only. The difference shows up when illustrating the levels of the economic downfalls, which depends on the severity of the pandemic at hand. Globally, there are plans that could be implemented in wake of future pandemics to safeguard the economy from deterioration.

Resilient Supply Chains

The sudden lockdowns of workplaces and border cutbacks across the globe led to unexpected supply-chain interruptions, ultimately interfering with the smooth flow of medical supplies. Some countries were so strict to allow trade across the borders, even for essential services such medications and other generalized medical supplies. In preparations for the future demand and supply uncertainties, and particularly crucial needs arising from pandemics emergencies, it is a fundamental resolution to think of objective changes in the manufacturing advancements (Higginson et al., 2020). Countries should also be devoted to practice an open and transparent flow of basic necessities such as medical goods and services, food products, and energy sources. (Higginson et al., 2020).

Technology Recommendations

Universally, one of the proposed resolutions to future pandemic emergencies is to invest in technological knowledge. A planned data system is critical in sharing info4mation from a local level to state and international levels. The connectivity can inform the policymakers about the essential information they need to understand before making any decisions (Higginson et al., 2020). When there is limited information about a particular issue, such as the COVID-19 pandemic, it means that the policymakers will decide without proper comprehension of the potential effect of the virus (Higginson et al., 2020). Furthermore, data technology and network systems come in very useful in anchoring smooth communication about a patient’s conditions.

Labour Force Recommendations

The stringent measures that were put in place during the early spread of Coronavirus were specifically to shun the transmission rate. However, for the recovery of the economic base, the COVID-19 mitigation measures need to be reconsidered. The lessons learned during the financial crisis should drive the governmental organizations to become more aggressive against a similar occurrence while there is still time. During emergencies, income support payments play an indispensable role in providing a rapid financial backup. Income insurance supplementary schemes come in handy during an economic downturn because of they support the economic foundation from fully succumbing to the pandemic effects.

Response Modelling 

The incorporation of epidemiologic and global economic models will essentially move a long way in making informed policy that balances things off. Thinking of econometric models in the line of risks associated with human behavior can be helpful in predicting the spread of the virus. The main contribution of a combined model is to predict the future, thus providing future-oriented planning, which results in global preparedness for future urgency.

Healthcare Sector Recommendations

An economic foresight and fore-planning is a strategically instrumental approach in preparing for any future healthcare urgency (Higginson et al., 2020). For instance, we understand that pandemics are costly to manage and eradicate based on previous global experiences. The pandemics add extra pressure on the strict financial allocation. During pandemics like the current one, the world can feel the change of plans by diverting specific funds from other purposes into the health sector. The federal and state authorities should down their tools to ensure that there are defined financing arrangements that cater for future health crises (Higginson et al., 2020).

Conclusion

In the contemporary societal situation, the world has basically learned the incorporation of different policies to rise against the spread and virulence of the Coronavirus. The lenses of the globe focused mainly on maintaining a good state of health and safeguarding people’s lives. t However, the lockdowns and mobility restrictions posed a great challenge in the global economy, creating an imbalance between the public’s well-being and the economy at large. The consequences of the policies are felt at every corner of the world, reminding the policymakers contantly to integrate economics in decision-making. In this way, the world will be safe from economic shocks that stem from a lack of prior planning.

 

Bibliography

Higginson, S., Milovanovic, K., Gillespie, J., Matthews, A., Williams, C., Wall, L., Moy, N., Hinwood, M., Melia, A., & Paolucci, F. (2020). COVID-19: The need for an Australian economic pandemic response plan. Health policy and technology, 9(4), 488–502. https://doi.org/10.1016/j.hlpt.2020.08.017

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7452864/pdf/main.pdf

Ibn-Mohammed, T., Mustapha, K. B., Godsell, J., Adamu, Z., Babatunde, K. A., Akintade, D. D., Acquaye, A., Fujii, H., Ndiaye, M. M., Yamoah, F. A., & Koh, S. (2021). A critical analysis of the impacts of COVID-19 on the global economy and ecosystems and opportunities for circular economy strategies. Resources, conservation, and recycling, 164, 105169. https://doi.org/10.1016/j.resconrec.2020.105169. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7505605/pdf/main.pdf

Marek Dabrwoski, Osman Bahadır Dinçer, Alexey Dolinskiy, Oleg Demidov,   G Radhika Desai.lobal Corporations and Economy. “Fighting the COVID-19 Pandemic: Economic Dilemmas and Choices”… Expert Opinions. 2020  https://valdaiclub.com/ .

Maritz, Alex, Aron Perenyi, Gerrit de Waal, and Christoph Buck. “Entrepreneurship as the unsung hero during the current COVID-19 economic crisis: Australian perspectives.” Sustainability 12, no. 11 (2020): 4612. https://www.mdpi.com/2071-1050/12/11/4612

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