In order to analyze the effects of the COVID-19 pandemic, Reyna Vergara Gonzaléz, professor and researcher at the Faculty of Economics of the Autonomous University of the State of Mexico (UAEMéx), conducted collaborative research on the experience of economic recovery of this global phenomenon.
The researcher at the Center for Research in Economic Sciences (CICE) of the UAEMéx was interested in the government’s willingness to combat the magnitude of the 2020 recession and the difficulties in recovering the path of economic growth. Therefore, to carry out his research, he addressed the effects of the economic policy measures that different countries applied to alleviate the pandemic situation.
The health crisis of 2020 showed, he said, that, beyond the challenges to health systems around the world, economies were affected by both the supply and demand sides, which led to significant falls in production, not seen since the Great Depression of the 1930s. To get out of the situation, most countries applied expansionary fiscal and monetary policies.
“Fiscal policy involved greater spending by governments to support families, especially those who lost their jobs. In the case of monetary policy, most central banks reduced their reference interest rate and provided favorable conditions for families and companies so that they could face this pandemic situation,” he noted.
The sectors most affected by the pandemic were tourism, services and activities that required direct contact between people and which, due to the closure of “non-essential” activities, had to significantly reduce their workforce.
In terms of importing, supply chains were broken as companies could not obtain the inputs needed to produce, creating a considerable logistical challenge.
However, he added, “once the economy began its recovery, demand began to grow more than supply, which resulted in an increase in prices.”
Among the main conclusions of the research are that the great magnitude of the supply and demand shocks affected the dynamics of production in most of the countries and that the economic policy response of the Mexican government was not very different from the international experience. .
Finally, Vergara González urged the university community interested in research to enter the world of macroeconomics, since this is a branch of economics that allows analyzing aggregate variables, both production, employment and prices, among others. Likewise, he invited the students to take advantage of theoretical knowledge that is applicable empirically, demonstrating that contrasting theoretical precepts with reality enriches knowledge and therefore student learning.
