How Important Is The Role Of Economists During A Pandemic
The COVID-19 pandemic has been a very prominent example of how important economists’ contributions have been to try and control the negative economic impacts of the virus. Pandemics may be initially associated with healthcare specialists like doctors and medical researchers, however, economists play an essential role during and in the aftermath of any natural disaster. This is since many economic processes are taken into account when spending plans are devised and when any financial decision is made. Hence why the monitoring, predicting and planning of economists is particularly important during a pandemic.
Economists’ influence on both the fiscal policy and the monetary policy is one positive way in which they can improve the quality of life of a country’s citizens. In recessions, which are commonly caused by widespread pandemics, economists may encourage governments to employ an expansionary fiscal policy that consists of increased government spending and tax cuts. This encourages aggregate demand which can boost the economy back into growth and is commonly considered to make things better for citizens. Similarly, the government is encouraged to edit the monetary policy, lowering interest rates, which results in it being cheaper to borrow money. Economists would push the government to do this in the face of economic uncertainty, however, the UK government can not take these steps during the current pandemic due to the interest rates already being low at 0.1%.
Moreover, the government’s reliance on economists does not end there. When spending plans are formulated during pandemics, economists help the government in distributing money to help citizens and small businesses get back on their feet. For small businesses, it has been seen in the support schemes which include emergency funding, grants to assist with cash flow and loan schemes which all work to keep businesses afloat to contribute to the economy as soon as possible. For individuals, it is evident in the job retention scheme, self-employed income support and the furlow scheme which all support citizens enough to keep them from unemployment or poverty. This is especially important as it is incredibly difficult to come back from both poverty and unemployment, particularly during recessions due to the difficulty to find a stable income and extremely high competition for jobs. Preventing and protecting citizens from being in these states puts them in a much better position to get through the pandemic with relatively reduced struggles.
Processes such as the multiplier effect are used by economists to maximise the results of investments by the government which are very important for sectors such as healthcare in pandemics since capital investment aids their productivity potential significantly. Capital investment in the healthcare industry includes funding for technological development as seen in the grants to small healthcare businesses to increase cybersecurity which prevents further costs in the long term. Similarly, investment includes funding for new machinery or space as seen in the increase of ventilators in many hospitals across the UK and the nightingale hospital built for the COVID-19 pandemic. Similarly, investments into training are very useful during pandemics, for example, the British government (through the NHS) gives grants to medical students to help with their training and to encourage them to join the NHS force which is a very efficient way to gain more trained labour.
During pandemics such as COVID-19 economists have also helped the government to invest more efficiently into the public sector of education to combat the decline in quality of education and the inevitable increase in the education gap which seems to be around 46% in the current pandemic. All of these factors tend to have a very large impact not only on school children but also on their families. The influence on the government to efficiently invest is discernible by the organisation of free school meals at home which are being provided along with better access to online devices and connections which all work to keep less financially fortunate students from falling behind their peers who may have had better access to learning materials. In the short term, this improves the quality of life for the families and in the long term, it is a crutch for future generations to have better qualifications and opportunities for higher paid jobs which means that the scheme will better their lives both ways.
For bye investments, the government uses economics to monitor, predict and plan impacts of pandemics to suitably respond to minimise damage on the economy. This means that since economists discern the state of the economy they help in managing the country’s productivity to make it as close to the potential as possible at the time. The government is only able to do this due to the factors used to analyse national income such as the factors of productivity and aggregate supply and demand data. On that account, the monitoring affects future planning which could result in a better economic state for future generations along with ones that live during the pandemics. This can be seen in how the COVID-19 pandemic caused the UK’s GNI to drop by £85,826m in value. If it weren't for economists keeping this data under observation, the economy’s terrible state would not be recognised fast enough to slow or change the downwards course. This reflects how economists are improving the state of the economy and as a consequence, improving the quality of life of citizens.
Similarly, many individual households monitor the economic state to plan for the short and long term as well. This allows income to be spent responsibly on a smaller scale. Monitoring the economic state could prevent consumers from making risky financial decisions when the economy is unstable. Additionally, during recessions when consumer confidence in the economy drops, people tend to either save more or invest money in high-value materials such as gold and diamonds which is a good investment to prevent savings from losing value if interest rates drop to negatives or to prevent overspending in times of economic crisis such as pandemics. This results in individuals having safer financials and gaining money in the form of assets later in life when the investments grow in value. This concept also aids small businesses or self-employed individuals who may take the same path in investing or saving to protect their livelihoods which results in them bettering their financial security.
Just as economics has a large sway on the government, economists also have a large sway on independent firms which have large roles in pandemics. This is prevalent in the firms trying to develop and manufacture products such as the Pfizer or the AstraZeneca vaccines and even firms that are now mass producing personal protective equipment. These sectors of the economy now have to extensively increase their output due to an extremely high peak in demand which is important for both the companies’ survival and the protection of citizens in day to day life. Without the firms considering utilising all of their factors of productivity to the utmost efficiency to produce these goods as quickly as possible, the social and economic states, not just nationally but globally would be significantly worse off than they currently are. Additionally, firms predicting the results that could come from the changes. This is particularly identifiable in software companies such as subscription companies that have to monitor the economic state. This sector is thriving due to monetising a strategy to shift businesses to online domains and more technological methods rather than the standard high street retail which can be practically impossible to reach in countries severely affected by the pandemic. Similarly, industries such as communications and media also tend to prosper pandemics as seen in the flourishing video communication apps such as Zoom and social platforms such as Tiktok. These corporations recognised that demand was going to grow and responded accordingly to meet expectations and improve the ease with which people communicated online.
In conclusion, economics plays a major role within both the government and in the private settings of independent corporations which reflects how relevant it is during high-pressure times such as pandemics. The necessity to monitor and carefully respond to economic changes simply exacerbates the importance of economics in these situations. All of the influence that economics has on investments and methods of support from the government are examples of how important economists are in making pandemics more tolerable from a social perspective and not just an economic standpoint. Furthermore, economics is not only essential for the present but it is also about planning and investing to make the short and long term future as shown in healthcare and education meaning that economics is essential in all business and spending. This denotes that especially during pandemics, economics is a key thing to consider before making large financial decisions within the government, companies or even in a household and that when regarded properly, it could be very rewarding on each scale.