Will The Economy Collapse? Impact Of COVID-19 On Global Economy6 min read

covid 19 impact on economy

Is the Economy Going to Crash Because of Coronavirus?

Sometime during the late 1760s while serving his apprenticeship as a surgeon Edward Jenner learned that dairy workers would never have the often-fatal disease smallpox, because they had already contracted cowpox, which has a very mild effect in humans.

In 1796, Jenner took pus from the hand of a milkmaid with cowpox, scratched it into the arm of an 8-year-old boy, and six weeks later introduced the boy with smallpox, and surprisingly the boy did not catch smallpox. And that was the . The vaccine simply provides your body with a dead or weak version of the virus to train your immune system to recognize and prepare its defenses ahead of time.

The idea behind it might sounds simple, but it can take up to 10 years to develop. Even if the entire world comes together to create one against COVID-19, it is probably going to take at least 12 months. Before a vaccine can be used, it needs to be tested to let the scientists know that the vaccine is safe. Then the researches will have to find out if it actually works and prevents COVID-19 through multiple tests. Then, a large scale test on animals should be conducted to ensure that the vaccine does not cause any side effects. Then they have to figure out the required dose, especially among different age groups, and find out if it works similarly amongst them. And that could take at least a year.

Even if we could hypothetically get it right, it will take another few months to manufacture it at large scale. Ship to every country and inject it into people’s arms. There are 3 ways this pandemic would come to an end.

The first one is unrealistic, but nevertheless possible. Every country in the world manages to deal with the virus simultaneously, and no more cases would come up, which seems unreal already.

The second way is, the virus keeps spreading around the world, infecting as many people as possible, leaving behind strong immune systems until it won’t find a viable host. But it will leave behind millions of deaths since those with weak immune systems won’t survive.

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And the final way is, the entire world would quarantine until we come up with a vaccine, it will leave behind many fewer deaths but it will be long and would hugely damage the economy since most people won’t be working. But, even if we bring the virus to its knees. There’s a reasonable chance that one infected person will spark it again sometime in the future as it was with Ebola. It is almost impossible to hide from a pandemic of this scale. Sooner or later, everyone will all get infected. And since we don’t have a vaccine, we can create a social vaccine.

We are now divided into 2 groups. The first one includes doctors, hospitals, and everyone else who is involved in treating this disease. The second one consists of the rest of us. If we all get sick at the same, obviously the first group won’t be able to take care of us all simultaneously, there won’t simply be enough beds, ventilators and doctors. So the death toll would skyrocket as it was in the case of Spanish flue; it was a fast pandemic where 65 up to 100 million people died. But what we, the second group, can do is buy more time by isolating ourselves, wearing masks, gloves and doing our best not to get infected.

We can turn it into a slow pandemic, And that’s what the scientists mean by flattening the curve. In 2015, Vox, an American news website and a pretty popular channel here on YouTube, asked Gates, “what is it you are worried about the most” and he made it clear that the chances of a widespread pandemic far worse than Ebola is the greatest risk humanity faces. A month before that, he gave a Tedtalk warning everyone that we are not ready for such a pandemic. But Gates wasn’t the only one.

Many health experts have written papers, books, and, in various ways, warned the governments that such a pandemic was inevitable. We were warned back in 2002 with SARS, then with MERS in 2012, and finally, with the Ebola outbreak, it taught us that we aren’t ready, but the world didn’t pay attention. The American Health Care system functions on the premise that unaffected states can come to aid of ones that are struggling in case of emergency, but that does not work with pandemics.

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We haven’t reached the peak of the pandemic yet, and it already had a huge negative impact on the economy. The S&P 500 is down by a thousand points, Dow Jones is down by 25 percent, and some of the largest companies in their respective industries seem to go bankrupt if this crisis would last few more months. Entire fleets of planes are grounded since countries closed borders, shops, restaurants, cafes are all shut down, and every business is suffering, especially hotels. And the unemployment rate has reached an all-time high – 6.6 million.

shop shutdown

This means people are not getting paid, which means people have less money to spend, which means the demand for goods and services is falling, which means businesses are suffering as well. What makes this crisis even more problematic is that we don’t know when it is going to end. It might take us a month, maybe 2, maybe 5 to get back to business. Big business might survive. If they won’t, the government, in most cases, would be there to bail them out, but small businesses are going to suffer; in fact many of them don’t have enough cash to survive even 2 months.

So the implications of this crisis are going to be severe since a huge number of small businesses would simply go bankrupt one after another. The wealthy members of the society would most likely invest heavily in the middle of this panic since most businesses are undervalued and are struggling. The crisis most likely would significantly increase wealth inequality that is already high. But it could turn the other way around. The panic would lead to a recession and then to a depression that could last years. Of course, central banks, including the fed, are planning to inject trillions of dollars into the economy as they did back in 2008.

The death rate of COVID-19 is significant, 3.4 percent according to most estimates, but if you give it a closer look, numbers tell us a different story. The death rate among people till the age of 49 is merely 0.2 percent. Which means 998 people out of 1000 people who get infected recover, which means, even if you get the virus, you are most likely going to recover. Even those who are elder, the death rate is 1.3 percent amongst the age group 50 to 59 and then rises significantly.

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Our immune systems are no strangers to viruses, we get them all the time, but our immune systems keep fighting against them. And in most cases, our immune systems manage to defeat them. But as you grow older, you are more likely to contract infectious diseases and, even more importantly, more likely to die from them. Respiratory infections, influenza, and particularly pneumonia are leading causes of death in people over 65 worldwide. And even in the case of COVID-19, the death rate jumps to over 8 percent for those who are 70 years or older.

The Good news is that you can strengthen your immune system, things like working out, having enough sleep, and eating healthy boost your immune system. On the other side, drinking or smoking would weaken you. It would increase your chances of getting infected and severely suffering from it. So a healthy lifestyle might be a matter of life and death now. What most people have discovered in the middle of this pandemic is how often they touch their faces.

One study found out that people, on average, touch their faces 23 times an hour, which might not seem much, but over an entire day it turns into hundreds. Touching your face can significantly increase the risk of infection with COVID-19. An itchy nose, tired eyes, wiping your mouth with the back of your hand are all things we do without a second thought. Your mouth and eyes are areas where viruses can enter the body easily, and all it takes is touching them with a finger already carrying an infection.

Source:  Interesting Enough

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