Essay Example on Covid-19 Impact: US Economy and Global Industries

Gubernskaya (2017) look at the economic impact on the Covid-19 to the American economy and world at large. The articles argue that some industries have been positively affected by the disease, while others have not been effected. For example, the grocery industry has been influenced by the increase in demand for goods in the market since many people want to keep more food in their stores. The article points out how the producers of the meat industry are overweighed by the increase in demand as the consumer wants to store more products in the industry. However, pleasure is weighing on the rise in the production of the meat since one cannot hasten the animals' growth. Moreover, there is an increase in the general consumption of individual spending most of their time at home. Furthermore, fewer people are working; hence the economy is not working to perfection. Other factors impacting the demand for foodstuffs include the closure of restaurants. Basics of economics econometrics help one understand how CoviD-19 has impacted the general economy.

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One of the factors of understanding is the concept of demand and supply. People are demanding more as they focus on the increase in the number of stock they store for their products. They also consume more as they spend most of their times at home. This means that more pressure is put on the average supply of goods. Hence, in the short term, the available suppliers in the market cannot accommodate the current industry. Other expectations from the short term impact are the increase in the price of goods supplied in the economy. According to the law of demand and supply under reasonable condition, the rise in demand for specific goods and services results to the increase in prices as the suppliers opt to do away with some consumers (Petrova et al. 2019). However, the move to reduce the cost can be made by the government to maintain the prices of goods and services at par with the current price. These approaches include the abolition of the Value-added Tax and subsidizing all farmers.

Additionally, there is a misconception on an immediate increase in demand for the whole economy at an instant. The article argues that since there is an increase in pork for Browns families, all other farmers are challenged with the same problem. However, they failed to account for the closure of restaurants and the impact of the decline in demand associated with this move. The reason why brown products demand has increased is because he sells to households they demand more goods hence purchase more. There other farmers who sell their products to the restaurant and the closure deprived them the primary consumer for them the number of the consumers has declined. Generally, the law of demand implies that under the normal circumstances, the total summation of products in the market remains the same without an additional or reduction on consumption late. Therefore, those people who went to eat in restaurants will cook their pork and eat it. Generally, the instant change is relatively insignificant; the only challenge is consumers have not developed means to connect directly with farmers and abolish restaurants.

In the long run, the supply of goods in the market will mainly depend on the producers' freedom to employ rationality and how they will do it. The law of rationality argues that economy players will always anticipate any change in the market and change their behaviour to accommodate the expected change (Mitchell, 2002) Therefore, the article fails to help for the possibility of law of rationality in the long term when it assumes general consumption will increase. The supply will decrease with people at home. For example, people who have their salaries cut by the government will always anticipate the decrease in the amount of money they will spend in future. Therefore, they will decrease their level of consumption, including Rationing the amount of food they eat per day. Other expected change is the decline in the number of products supplied by farmers. Most farmers will be focused on producing more since they expect high demand in the future as people consume more. Therefore, they will do their best to increase the amount of product for their firms in the Long run. However, this largely depends on whether farmers will be allowed to remain at home, or they will be allowed to go outside to their firms. If there will be a complete lockdown for farmers, they will not be productive (Mitchell, 2002).

Finally, the Author has accounted for the Fluctuation of the economy to help in understanding the impact of COVID-19 on the demand and supply in the long-term. The application and supply will not be static but will vary from time to time. For example, now there is a high demand for foodstuffs; therefore, the demand is at the peak. However, in future people will have enough in their store; hence the demand will decline. The cycle will continue giving the producer a time to create more foodstuffs for the consumers. Therefore, when the demand is low producers will have a space to produce more goods on the other hand when it is high, they will sell foodstuffs produced during the recess.

Conclusion

In conclusion, the article from the podcast accounts for four economic concepts. The concept of demand and supply, rationality, static nature of an economy and the level of consumption among the consumers. Therefore, there is a possibility of an insignificant change in demand and supply of the food industry in case the farmers are not enforced to remain in the lockdown, and they are given enough resources to continue in their production.

References

Gubernskaya, Z., & Tang, Z. (2017). Just like in their home country? A multinational perspective on living arrangements of older immigrants in the United States. Demography, 54(5), 1973-1998.

Mitchell, G. (2002). Why law and economics' perfect rationality should not be traded for behavioural law and economics' equal incompetence. Geo. LJ, 91, 67.

Petrova, G., Posadneva, E., & Morozova, T. (2019). Leading the Labour Market by the Laws of Supply and Demand. In Sustainable Leadership for Entrepreneurs and Academics (pp. 263-271). Springer, Cham.