Economic Environments

According to the “covid-19: How to fix the economy” video by The Economist in Oct. 2020, What economic policies have governments taken to combat economic crises in the past, and during the covid-19 pandemic? What may be their unintended results and why?

The video provided by The Economist was very well done, as it was concise in sharing actions that need to be taken to help an economy recover. The first step is "Spend first, save later." In this step, the government borrows a lot of money and provides corporate bailouts and social assistance programs to support civilians. Step two, "Embrace change." The change will inevitably occur rapidly in time of a crisis. In the U.S., we saw two specific types of change- tech and the service industry. Tech makes it possible for employees to work from home, doing many jobs that support the movement of our economy. Now that we're out of the lockdown days of the pandemic, companies will inevitably reevaluate how many workers need to be in an office. This could result in smaller office spaces rented or more offshoring of jobs. The service sector was hurting and needed to understand how to pivot to support itself. Bars and restaurants are primarily in-person experiences. However, these businesses had to embrace change and think creatively about take-out offerings and virtual mixology classes. Step three was "build a safety net." We saw this in the $2T stimulus package in 2020. Previously, the New Deal was signed after The Great Depression, and the financial crisis saw a significant bailout of the banking sector. Lastly, the fourth step is to "avoid turning inward." During the COVID-19 pandemic, we saw 120 new export restrictions in 2020. Historically, there are under five a year. We saw this same occurrence in the graph provided on lecture slide 34. We could see that the GDP and GNI were relatively the same two years after the financial crisis before our GNI rose above GDP in 2010. This protectionism stifles economic recovery and growth.

Related Topic

The COVID-19 pandemic opened my eyes to the interdependence of humans sharing spaces together. Whether it’s a state, and country, or the planet. Within my studies at UC Denver, I’ve had several ah-ha moments, one that is relevant to this week’s discussion.

Simply put, many of us are ignorant to what work looks like for those in developing countries. Our biases tell us that we shouldn’t support (i.e., spend money on) products that come from employees working in harsh working conditions, for wages we deem to be too low. Our intentions can be pure, while our actions would be hurting those we are trying to protect. All because our perspective is not broad enough.

A fact-based case study would be the COVID-19 pandemic. The world saw what was 200M impoverished rise to 500M impoverished months after March of 2020. More people were dying of starvation. Why? Because people couldn’t go to work in developing countries, and there was no social safety net to help them out, like we have in developed nations.

MGMT 6822 – Business Ethics & CSR does a great job of providing more insights into this topic. If you have an elective to spare and found the above interesting, you may want to check out Ira’s course.