Through a Keynesian Theory to Analyze the Economic Impact under the Outbreak of COVID-19 in China

Abstract

With the outbreak of COVID-19 pandemic, Chinese economy was hit severely and this disease brought a significant challenge for China. This was particularly the case for unemployment, the variation of GDP and the shrinking of small and medium-sized enterprises. The objective of this research is to investigate the impacts of COVID-19 in China, evaluating economic approaches being applied for different countries and point out the suitable method to boost the recovery of the Chinese economy from economic depression. The study used the fundamental concept of Keynesian theory to conclude the most effective approaches and showed that according to Keynesian theory, the Chinese government should implement expansionary policies to sustain economic growth by raising effective demand and solving unemployment problems. Therefore, the Chinese government can encourage the whole economy through fiscal and monetary policy.