COVID-19 Pandemic – economic impact and reaction

Abstract

The COVID-19 pandemic has crippled the global economy with losses of life and severe economic impact. The global economy passed through a simultaneous supply and demand shocks, caused by the curtailment and even cessation of activities with a direct presence at the workplace, which led to a slowdown in production and a reduction in the volume of services with physical proximity. At the same time, international transaction costs had increased due to the collapse of freight logistics. All these occurred a reduction in employment, losses of income, and ultimately a decrease in consumer demand. The study highlights the economic impact of the COVID-19 pandemic and economic policy options to mitigate its effects. The study concludes that, on the one hand, macroprudential and fiscal policies, as well as government financial interventions, have contributed to mitigating the economic impact of the COVID-19 pandemic, and, on the other hand, companies around the world have had to adapt to changing circumstances and consumers behaviours, and to find opportunities in times of crisis. These measures had required a lot of innovation, creativity and the development of new business models. This paper presents a summarizing study on the result of the global economic consequences of the COVID-19 pandemic and the measures that have been taken to overcome the consequences of current and further shocks. CZU: CZU [330.55+338.14]:614.4(100+478). JEL: E01, E20, I15, M10. DOI: https://doi.org/10.53486/icspm2023.03