Deciphering Economic Effects of COVID-19

Abstract

The novel coronavirus disease (COVID-19) has led to tremendous positive and negative effects in various economies across different countries worldwide. Nonetheless, despite the difference in economic structures of countries, the major effects of COVID-19 on economies are similar but tend to vary in magnitude depending on the level of development and climatic conditions in different countries. In this respect, this chapter is aimed at providing a critical approach to understand the nature of the positive and negative effects of COVID-19 on economies using the aggregate supply and aggregate demand (AS-AD) model in contemporary economics. The basis for this approach is to decipher the economic effects of COVID-19 on economies worldwide with reference to the theoretical literature in economics on the operationalization of market forces illustratable with the AS-AD model. Be that as it may, comprehensive discussions regarding the economic effects of COVID-19 on economies will also encompass contemporary findings in empirical studies on COVID-19. As such, the chapter will demonstrate how contemporary theories pertaining to the AS-AD model can be applicable in explaining the economic effects of COVID-19.