Fall In GDP Research Articles

Resilience and Vulnerability: Examining the Impact of COVID-19 Outbreaks on Indians

Even though the COVID-19 pandemic in India may have passed its height in 2023, it is still having a major effect on the country's population, economy, and healthcare system. After surviving the first wave, the public health system must now contend with the prospect of sustained pressure on its resources and workforce. Due to peak-time overcrowding, non-COVID illnesses may have gone undiagnosed or untreated. Because the pandemic hit low-income areas and informal labourers the hardest, socioeconomic gaps became wider. Many fell more into poverty as a result of lockdowns, company closures, and job losses. A possible fall in GDP and investment is one of the long-term effects that are just now becoming apparent. Anxieties about mental health also rose to the forefront. Anxiety, despair, and other mental health problems spiked during the lockdowns, social isolation, and virus dread. The road to complete recuperation will certainly be lengthy and need ongoing endeavours to fortify the healthcare system, tackle socioeconomic disparities, and offer mental health assistance to the populace; but, India has achieved progress in limiting the virus's spread. Keywords: COVID-19, India, Public Health, Long-Term Impact, Socioeconomic Disparity, Mental Health

The role of macroprudential policies under carbon pricing

This paper analyses the effectiveness of macroprudential policy on macro-financial fluctuations when the government enforces carbon pricing to reduce carbon emissions and achieve the net-zero target. A carbon tax policy alone can reduce carbon emissions by 2030, but at the cost of a deep and prolonged recession, with consequential financial instability due to a higher probability of default on entrepreneurs in the brown sector. This result suggests that carbon pricing should be coupled with complementary policies, such as macroprudential policy. In particular, differentiated LTV ratios and differentiated capital requirements that penalize the brown sector in favour of the green sector tend to decrease the probability of default in the green sector and encourage green lending in supporting the transition to a green economy. However, such policies have little contribution in offsetting the negative impact on the macroeconomy. More stringent levels of prudential regulations are needed to reduce the fall in GDP and consumption. More specifically, the “one-for-one” prudential capital requirements on fossil fuel financing can effectively reduce defaults and move to a greener economy.

Socioeconomic impacts of Russian invasion of Ukraine: A multiregional assessment for Europe

AbstractHistory shows that wars can be enormously disruptive of economic activity, especially international trade, national income, and global economic welfare. This article analyzes the impact on the European regions the Russian invasion of Ukraine using the largest and most updated multiregional input‐output model for Europe. Two shocks, trade and inflation, and four alternative scenarios are simulated. The scenarios are considered regarding the number of countries applying a trade embargo, the exemption of oil and gas, and the potential trade diversions with third countries such as China. We obtained a significant fall in GDP (−1.7%), 3.7 m lost jobs and 3% raise over the prewar inflation rate. For trade shock, large indirect effects are obtained, indicating the high relevance of the sectors and countries exposed to the war and the sanctions. The republics of the former Soviet Union, as well as the satellite countries of the former communism, face the harshest adverse impacts. This work shows the importance of breaking Russia's colonial economic ties to the countries in Eastern Europe.

Dynamic framework for strategic forecasting of the bank consumer loan market: Evidence from Ukraine

Accurate forecasting of consumer loan market behavior gives banks a huge potential to optimize their credit strategies by proactively adapting to external changes. This study aims to analyze and predict consumer loan demand, supply, and profitability in the Ukrainian banking sector. Using a systemic dynamic approach, the interplay of five key factors is considered: central bank policies, GDP fluctuations, changing competitive landscape driven by FinTech companies, investment in government bonds as an alternative to loan granting, and severity of credit risk management.The developed dynamic model for the bank consumer loan market in Ukraine offers predictive capabilities enhancing decision-making and strategic planning in the banking sector and can be adapted in open small economies. Within the proposed systemic dynamic model, five scenarios were explored. Compared to the base scenario, a 4 p.p. increase in the key policy rate results in UAH 4.7 billion decrease in demand for bank consumer loans and a UAH 0.55 billion reduction in lending profitability based on the year’s results. Fall in GDP by 6 p.p. leads to a decrease in the supply of bank consumer loans by UAH 6.9 billion and a decrease in lending income by UAH 1.3 billion based on the year’s results. Scenario with the decline of FinTech portfolio by 20 p.p. quarterly leads to an increase in demand for bank consumer loans of UAH 8 billion. A 4 p.p. rise in government bond yields leads to a UAH 17 billion reduction in the supply of consumer loans in the same quarter.

Coronavirus Pandemic and The Challenges of Oil Producing Economies in Africa: Nigeria And Angola In Comparative Perspective

The outbreak of the covid-19 pandemic has forced many economics of the world to diversify their economy, because of the negative impact of the pandemic on global economy. The IMF report shows that the global GDP fall by 3% in 2020, and an estimate of 2% growth was experienced before the outbreak of the covid-19 pandemic. This study seeks to engage in a comparative analysis of the challenges of oil producing economies in Africa with emphasis on the Nigeria and Angola economy. Secondary data were used such as textbooks, journals and other internet sources. This study reason why these economies were negatively affected was that both countries dependent heavily on the export of crude oil as their major source of foreign exchange earnings. This study argues that if both countries had diversified their economy respectively, the impact of the decline in the price of crude oil in the international market would not have affected their economy to the extent that it has affect it. Therefore, this study further argues that poor macroeconomic policies as well as corruption that characterized the mismanagement of the oil revenue has contributed in a no small measure in affecting the economies of both countries. It is against this backdrop this study makes the following recommendations as measures that will help address the challenges facing both Nigeria and Angola especially in the area of diversification of the economy and curbing corruption.

Challenges During the Period of Movement Control Order (MCO) Against the Success of Software Development Project Management Deliverables

Before it was declared a pandemic in March 2020, the Malaysian government was compelled to begin enforcing the MCO countrywide on 18 March 2020, and the World Health Organization classed the COVID-19 outbreak as a public health emergency. The MCO’s implementation significantly impacted the Malaysian economy, resulting in a 17.1% fall in GDP in the second quarter of 2020. Implementation of MCO during the Covid-19 pandemic has direct and indirect effects and implications on project management. This situation also may interfere with the project deliverables since project management is extremely sensitive to rapid changes. The issues that the project manager faces and how the software affects project deliverables have been examined in this study. From the standpoint of a software development project, the researcher will identify the challenges the IT project manager poses and their impact on project deliverables. In this study, we will evaluate whether implementing the MCO during the Covid-19 pandemic has given significant challenges to the IT Project Manager to successfully deliver the software development project. The literature review resulted in challenges; furthermore, the interview with three IT Managers of an ICT company in Malaysia discussed 18 challenges drawn from the analysis of the interviews. Hence, these findings of the innovative study area on software development have provided an enhanced judgment and interpretation on deciding mitigation strategies in the early stage of software development projects during the MCO.

Resource-use intensity and the labour market: More for less?

Although the circular economy primarily focuses on closing supply chains, residual waste management, and product lifetime extensions, reducing resource use remains critical. This paper examines the system-wide impacts of reducing resource use using a multisectoral computable general equilibrium model. Although not strictly circular, the focus is on a costless ‘technology shock’ that reduces the consumption of intermediate goods in the construction sector and its system-wide effects. The results suggest that there is potential for reductions in CO2 emissions, but this is accompanied with a fall in GDP and employment, with unskilled workers experiencing larger negative employment effects. However, the scale of these GDP and employment effects is small, despite relatively large reductions in resource use. This indicates that technology-induced reductions in resource use have the potential to support the transition towards an economy that uses fewer resources without causing significant disruptions at the macroeconomic level.

Unraveling the Subprime Crisis

This paper investigates the importance of studying the financial crisis in 2008, especially under current situation of COVID-19 and Ukraine Conflict. The three primary factors that contributed to the financial crisis in 2008 were the Fed's monetary policy, the credit default swaps, the crisis of subprime mortgage crisis. The Fed’s monetary policy was loosen and then the subprime mortgages were induced, which in turn caused the credit default swaps lending to the collapse of the financial system worldwide. There were several severe consequences caused by the financial crisis, including the sharp fall in GDP of both developed and developing countries, breakdown of banks, especially the collapse of Lehman Brothers, decrease in unemployment and the rise of household risk. In order to recover from this crisis, several changes has been proposed, implemented and revised, including the Dobb-Frank Act and Basel III. Overall, the importance of studying and understanding the financial crisis has been addressed effectively in this article in order to better the existing financial system and learn from history.

Uncertainty shocks in emerging economies: A global to local approach for identification

The paper investigates the effects of uncertainty shocks in emerging economies (EMEs). I construct novel measures of uncertainty for fifteen small EMEs and to address endogeneity I instrument them with fluctuations in global uncertainty. My results show that uncertainty shocks have substantial contractionary effects on GDP, stock prices and local currencies and the recessionary effect is much stronger in EMEs compared to advanced economies (AEs). I also estimate a negative co-movement between prices and output which triggers a delayed monetary tightening in correspondence to the inflationary peak. Counterfactual scenarios reveal that in the absence of uncertainty shocks, the fall in GDP recorded in EMEs during the 2008–2009 crisis would have been attenuated by around 2%.

Economic and financial consequences of war in Ukraine: analysis of development scenarios

Abstract The war affects the socio-economic state of Ukraine and is the cause of the deterioration of the economic situation of neighboring countries. Under such conditions, there is a need to carry out assessments of economic losses from the conduct of military operations and forecast the main economic indicators for the nearest period, taking into account the impact of the war. The purpose of the study is to calculate the losses to the economy, the destruction of residential facilities and critical infrastructure facilities in the first 100 days of the war, the assessment of the potential volume of the fall in GDP and the calculation of projected fiscal losses. The calculation of GDP reduction was based on the forecasts of the International Monetary Fund, the World Bank Group and the Government of Ukraine. The expected amount of GDP reduction is calculated using the GAP-analysis method, based on the forecasts made by these institutions in the prewar period, and the calculation of the level of GDP during the war. Based on the results of the conducted research, it was established that the economic losses from the war consist not only of the losses incurred and the reduction of GDP volumes, but also of the lost opportunities for development and unearned profits. In addition to the reduction in GDP, Ukraine’s losses are manifested in the increase in the level of public debt, the depreciation of the national currency, the reduction of gold and currency reserves, and the outflow of foreign direct investments3.

Navigating LDC graduation: modelling the impact of RCEP and CPTPP on Bangladesh

Bangladesh will graduate from the LDC list by 2026. Currently, Bangladesh's exports of readymade garments (RMG) benefit from international support measures which allow preferential trade in major export destinations, such as the EU. After graduation, Bangladesh's exports, particularly RMG, will face competition from mega trading blocs, such as RCEP and CPTPP. This article employs the GTAP model to estimate the impact of Bangladesh's graduation from the LDC category and how mega FTAs are likely to affect Bangladesh's exports and potential welfare. The model also considers the scenarios of either United States or the UK or both joining the CPTPP. The model results show that Bangladesh's graduation will lead to a fall in GDP and RMG exports by 1.53% and 11.8%, respectively. The negative impact is magnified when we factor in the mega-trading blocs. Further negative impacts are observed when either United States or the UK or both join the CPTPP.

Pigouvian taxes to internalize environmental damages from Chilean mining−A computable general equilibrium analysis

In several countries, mining taxes are applied as a mechanism to collect resources but without adequately evaluating their economic impacts. From a theoretical perspective, the implementation of royalties can be justified in the non-renewable nature of mining resources. In contrast, Pigouvian taxes aim to make productive activities internalize their environmental damages. This study illustrates the general equilibrium effects on the Chilean economy of replacing the current royalty on copper mining with Pigouvian taxes, considering various environmental damages. For the above, a computable general equilibrium model is developed and calibrated with a Social Accounting Matrix base year 2016. The results show that the internalization of all environmental damages would generate a significant drop in mining activity and electricity generation, contributing to reducing greenhouse gas emissions . Also, it is observed that the fall in GDP and increase in the real exchange rate would modify the production of other tradable and non-tradable sectors, benefiting non-copper export sectors. The fall in economic activity reduces the payment to productive factors, although the impact is greater on capital and skilled labor. The fall in income is more remarkable in the richest households than in the poorest households, which improves income distribution but increases poverty. Finally, the results on poverty reflect the need to implement monetary transfers to the poorest households.

The fiscal response to the Italian COVID-19 crisis: A counterfactual analysis

The COVID-19 pandemic is an unprecedented worldwide event with a massive impact on the economic system. The first Western country that had to face the COVID-19 crisis was Italy, which therefore represents a natural “case study.” By using the microdata and granular policy information available at the Italian Ministry of Economy and Finance, this paper provides a macroeconomic quantitative assessment of the initial emergency fiscal measures introduced in 2020 and an analysis of the impact of the COVID-19 shock during the lockdown. We find that emergency measures avoided an additional fall of GDP of about 4.4% in 2020. The impact of public interventions on the dynamics of investments is particularly significant.

The evolving role of national central banks

The article is devoted to the study of modern trends in the development of functions and instruments of central banks (CB). The article aims to identify new CB approaches to crisis management and the used tools’ analysis and to study the transformation of CB activities and their current role. The authors use general scientific and special research methods, including comparative legal analysis and the method of systematization. The article focuses on the current international discussion on the evolving role of CB, provides an overview of experts’ opinions on issues related to assessing how CB activities influenced the formation and development of the 2007 global financial crisis. The spread of the latest crisis caused by the COVID-19 pandemic was different from the spread of the 2007 crisis when financial markets were first hit and then stress spread to the real economy through reduced confidence and tightening credit conditions for businesses and households. The authors note that the pandemic crisis developed differently: first, the real economy was affected, which was accompanied by a fall in GDP, and then conditions in the financial sector worsened. The authors systematized the CB measures in response to the pandemic and analyzed them by groups of countries: the CB measures of the advanced economies and countries with emerging markets were broadly similar. Based on a comparative analysis of the monetary instruments, the authors conclude that the advanced economies CBs have extremely limited opportunities to use interest rates to manage the crisis, while the emerging markets CBs still have some space for their regulation. The paper also analyses other CB instruments used during the crisis caused by the pandemic. The authors note that the measures implemented by CBs reflect their increased role in modern economic systems and the change in the long-known traditional functions. This research may be useful to state bodies in the implementation and coordination of the policy in the field of regulation of CB activities.

UKRAINE’S PARTICIPATION IN EUROPEAN INTEGRATION PROCESSES

The article examines international economic integration processes, goals and forms of international integration. Special attention is paid particularly to European integration processes and the historical path of Ukrainian European integration. Positive shifts in the direction of further European integration are indicated: proposals and plans of European countries to help our country in the difficult time of being at war, by intensifying economic and political integration processes. The political component of integration processes is considered with an emphasis on historical events, the results of European integration in the last year 2021, the current state in 2022 and plans for the near future. The economic consequences of Ukraine’s European integration are considered from the point of view of bilateral trade with the EU and the dynamics of Ukraine’s GDP in recent years. It has been proven that the results of export-import transactions with the countries of the European Union have a positive effect on the level of GDP growth. The main focus is on the negative consequences for the country’s economy, in particular the fall in GDP, which may occur as a result of the russia’s full-scale invasion of the territory of Ukraine. The results of the activity of the single industry of IT services, which continues to actively develop in the conditions of the war and should ensure the transition of Ukraine to the post-industrial technological order, are considered. The need for further development of the IT industry, which is an active participant in integration processes and will have a direct positive impact on the country’s economy in the future, is noted. It has been found that one of the promising ways of further European integration of Ukraine during the war is to increase the volume of export-import operations with EU countries, in particular through the provision of services by Ukrainian IT companies.

Зарубіжний досвід вирішення проблемних ситуацій в регіональному розвитку після воєнних конфліктів

The military aggression of the RF, which began on the 24th of February 2022, has already led to a huge number of deaths, the loss of industrial enterprises due to their complete or partial damage, the destruction of housing and other social infrastructure. These and other grave consequences together indicate a huge humanitarian catastrophe in our country. Currently, it is impossible to estimate all the losses of Ukrainian economy from the war owing to lack of statistics, but the projected drop in Ukraine’s GDP in 2022 will range from –10% to –40% provided that the active phase of the war lasts no longer than several months and the geography of the occupied territories does not expand. The projected economic decline as a result of hostilities is exacerbated by a sharp decrease in export opportunities due to the blocking of seaports, the loss of metallurgical enterprises, impossible sowing activities because of the mined agricultural fields, etc. As of April 2022, the most war-affected were nine regions of Ukraine, which in 2020 accounted for 30% of the country’s GDP, including the Kharkiv region. Under these conditions, it is useful to study foreign experience in solving problematic situations in terms of post-conflict regional development. The purpose of this article is to generalize foreign experience in solving problematic situations and economic recovery in different world countries together with their regions after military conflicts. The carried out analysis of the impact of military conflicts on the economies of the affected countries indicates the rapid dynamics of the fall in GDP per capita after the military actions. Therefore, the issue of creating effective mechanisms for solving problematic situations in regional development caused by the war arises immediately after the completion of hostilities. The peculiarities of the implementation of the Marshall Plan as an exhaustive example of an effective mechanism for the reconstruction of the economy of European countries and their regions, the elimination of trade barriers, the restoration of production potential, and the development of a democratic society are researched. An analysis of the experience of Yugoslavia after the Second World War, when obtaining assistance from the United States, which allowed to introduce a sufficiently effective State policy to stimulate the socioeconomic development of the country’s troubled regions, is carried out.

РОЛЬ СОЦІАЛЬНО-ЕКОНОМІЧНОГО РОЗВИТКУ ІНДУСТРІЇ ТУРИЗМУ В ДОСЯГНЕННІ ЦІЛЕЙ СТАЛОГО РОЗВИТКУ

The article examines tourism as a complicated intercultural and intersectoral complex that provides solutions to major economic and social problems and is one of the most profitable sectors of the economy, the most dynamically developing, being an important part of foreign economic activity of many countries. The development of the socio-economic function of tourism is one of the most important areas of economic development of any country, given that the multiplicative impact of tourism contributes to achieving the goals of sustainable development. The article analyses the uneven growth rate of international tourism in the territorial context, which led to a change in its regional structure. The article reviews the main indicators and statistical trends in world tourism under the influence of the COVID-19 pandemic. The travel and tourism sectors were found to have suffered losses of almost 4.5 trillion US dollars and reached 4.7 trillion US dollars in 2020, while the contribution to GDP fell by a staggering 49.1% compared to 2019; compared to the fall in GDP of the world economy by 3.7% in 2020. Analysing the national development of tourism, it was found out that Ukraine belongs to the group of countries with a negative balance of payments, which is a net importer of services. In addition to the negative impact, possible promising areas of development caused by quarantine restrictions were outlined, which included: introduction of online technologies (paying more attention to hygiene and a healthy lifestyle); active use of non-cash and contactless payment methods, means of address delivery; the possibility of attracting tourists from neighbouring countries (for which visiting Ukraine has certain advantages: logistics, lack of language barrier, developed routes), in order to attract tourists, companies will be ready to provide better service etc. A review has been carried through as for the recommendations of the Global Crisis Committee on Tourism on a plan to rebuild the global tourism industry, including recommendations on sustainable development goals and the opportunity to move to a circular economy.

ECONOMIC RESPONSE OF THE EUROPEAN COUNTRIES TO THE FIRST WAVE OF COVID-19

COVID-19 pandemic has caused the deepest crisis since the World War II. Many countries have slid into recession due to continuous GDP fall. Lockdown has an impact on unemployment growth, while the provision of health systems and state aid to vulnerable sectors and population are deepening fiscal deficits. Based on the example of 31 European countries (27 EU members and several countries with which the Union has different agreements), this research determines impact of key economic and social variables in period of the First wave of COVID-19 pandemic on the “Economic stimulus”, which is represented by composite index CESI. It is about a combination of variables: Democracy Index, Stringency Index, Final Consumption, Gross Investment, Health Expenditure, and Hospital Beds per Thousand People. Using the median method, the total sample has been divided into two groups, the one with less and the one with more infected people. The results of cross section regression analysis show that 52% variations in the Economic stimulus in the total sample is determined by predictor variables in the model. Analysis for the countries with less infected people shows that more than 75% variations in the Economic stimulus is determined by joint trends of the predictor variables, while the Analysis with more infected cases shows coefficient of determination (R2) over 71%. In general, the results of econometric analysis unambiguously show that democracy contributes to the economic policy response to pandemic in all three observed cases. Stringency index contributes to democracy in an inversely proportional sense, especially in the case of countries with larger number of infected persons. The same could be said for the variable Final Consumption in the case of the total sample of countries, where markedly reduced final consumption requires stronger economic reaction and the governmental aid of all the countries included in the sample.

Why Countries Differ Greatly in the Effects of COVID-19

In some studies, the fall in GDP in the context of the COVID-19 pandemic is seen as a kind of payment for the reduction in mortality from this virus. This interpretation of the relationship between changes in GDP and the number of GOV/D-19 deaths per 100,000 population is one explanation for the differences in mortality rates between countries. The article examines the validity of this interpretation of the fall in GDP of many countries in 2020. In addition, several other characteristics of different countries are involved in the scope of their comparison by the effects of COVID-19: Ranking of happiness, Health spending as percent of GDP, Government Response Stringency Index. As the regression analysis shows, the circumstances included in the review do not fully, but to a large extent, explain the differences between countries in the mortality rate from COVID-19. In contrast to the estimates available in the literature, a weak relationship between the unequal distribution of income in a country and its mortality rate from COVID-19 is shown. The research is based on statistics from thirty countries. The forecast estimates of changes in their GDP, updated by the World Bank in January 2021, are used. The general conclusion of the article is that a strong fall in GDP and high mortality from COVID-19 are the result of a number of countries ' unwillingness to face large-scale challenges that disrupt the usual course of events. This situation is very alarming, since the industrial revolution is also one of these challenges.

Forensic Analysis of the Impact of Covid-19 Pandemic on the South African Economy

The World economic activities were brought to a standstill in late 2019 through 2020 without a single gunshot but caused by a global pandemic called “Covid-19”. Sadly, the root causes or origin of this pandemic is yet unknown despite all efforts by the World Health Organisation and other relevant authorities. Covid-19 has caused an unquantifiable economic damage more than expected in South Africa. It affected all facets of its economic system ranging from stock market, tourism industry, production industry e-tal. Global demand for South African export products fell by 14% of its GDP in the Q2 of 2020. Most major economies in the World lost more than 4% of their gross domestic product in 2020 and many countries entered recession due to the covid-19 pandemic. This pandemic has caused both hyperinflation and high rate of unemployment in South Africa. Data from 1960 shows that the second quarter of 2020 experienced a greater fall in GDP than the annualised decline of 6.1% in the first quarter of 2009 during the global financial crisis and was “far steeper than the annualised 8.2% decline in the fourth quarter of 1982”. Overall, South African economy is still bedevilling/suffering from the collateral damages caused by covid-19 pandemic.