Economic Scar Tissue of COVID-19 Puzzle: An Analysis, Evidence and Suggestion on Global Perspective

Abstract

The COVID-19 pandemic has instigated tremendous human and economic hardship around the world. Using meta-literature and time series analysis, we conduct both synthesis and empirical analysis to investigate particularly the economic perspectives of COVID-19 across several financial systems: (a) Asian market, (b) European market, (c) American market and (d) Gulf Cooperation Council (GCC) and Middle East and North Africa’s (MENA) market. The critical review of the leading business and finance journals of ISI-WOS summarizes that the outburst of COVID-19 mercilessly affects global economies; however, the end phase of the systematic cascading effect has not clearly folded yet. The probable reasons of economic downturn are productivity reduction, labour immobility, undue job loss, scarcity of employment opportunities, discontinuation of supply chain, declining foreign exports, investment uncertainty, adverse clientele effect, etc. However, after analysing the pre- and during COVID effect on foreign reserve and remittance, we identify an inconclusive finding: (a) bullish trend, (e.g., the USA, Canada, Mexico, Japan, India, Bangladesh and Singapore); (b) bearish trend, (e.g., the UK, Sri-Lanka, Saudi Arabia, Malaysia, Nigeria, Italy and Brazil). Our time series analysis between pre- and during COVID-19 also documents the economic mystery that although the overall economic growth has gone down, foreign reserve and remittance have increased gradually across several economies. Overall, the current global situation demands systematic, well-targeted and aggressive fiscal-monetary stimulus initiatives. Therefore, this study offers theoretical, empirical and policy-oriented academic novelty with the possible suggestions and dynamic strategies to circumvent COVID-19 adverse effects.