Impact of COVID-19 on the Global Economy: Prospects and Challenges

The outbreak of the deadly COVID-19 disease caused by Coronavirus has drawn the attention of researchers and policy makers to interrogate the utility of institutions in combating the pandemic. This study adds to the emerging literature by economists and other policy makers in fight against Coronavirus in World. There is rising literature on the possible aggregate implications of COVID-19 based on previous major disease experiences. The study explores the possible distributional consequences of these events, finding that the results of exacerbating inequality are close to those of other forms of crises, including by depriving those most insecure of job opportunities, such as low-skilled workers. The findings indicate that this pandemic may end up having a substantial adverse effect on inequality in the absence of concerted and strenuous efforts to protect the most disadvantaged segments of the society. In addition, our finding that the effect of inequality rises with the negative impact of pandemic events on economic activity indicates that, all the rest being equal, COVID-19's distributional effects could be greater than in previous pandemic episodes. From the report it is suggested that governments should act rapidly to provide stimuli and ensure uninterrupted supply chain.