A Review of COVID-19 and Its Waterfall Effect on the Changed World

Abstract

2019 novel coronavirus has affected over 19.3 million people and caused over 718 thousand deaths globally (as at 7 August 2020). The disease was named as “Covid19” and the virus that causes it was Severe Acute Respiratory Syndrome Corona Virus -2 (SARS-COV-2). On the eve of 2020, when the whole world was celebrating the new year, the virus was unleashing and conquering new territories, minute by minute. So, how come a small virus that is said to have originated from Wuhan, China was able to create such a big havoc? How did a flu-like-symptom virus was able to shackle economies and change the world we live in? What caused Governments to announce relief, fiscal and economic packages to prevent the large-scale economic collapse? The response lies in the way the virus made man-kind to live in the new world. Social distancing was the new norm that led to fewer interactions among people. Next, mass scale shut downs announced by the governments led to closure of financial markets, stock exchanges, corporate offices, exchange of trade as well as several events. No country was immune by the shocks caused by the waterfall effect of COVID19. The compounding rate at which the virus spread hinted several sectors were going to be severely disrupted. The current paper will analyze the waterfall effect of COVID19 on several sectors in the first half of 2020 (Jan to June 2020) and ascertain the fiscal, economic and monetary policies announced by governments in the top 5 affected countries and UAE as at 7 August 2020. The study will qualitatively ascertain how lockdowns and social distancing changed the world we live in and provide certain recommendations for future pandemics/ crises as part of research contribution.

Keywords: COVID19, waterfall effect, social distancing, monetary policy, fiscal policy, economic policy

JEL Classification: G21, G28, I11, I18