Specialisation: Economics

The Impact of the COVID-19 Pandemic on the Global and the US Economy


The COVID-19 pandemic has profoundly impacted economies worldwide, including that of the United States. The virus, which first emerged in Wuhan, China, quickly became a global pandemic, affecting millions of people and significantly impacting economies worldwide. The pandemic has caused a sharp decline in economic activity, leading to significant job losses, business closures, and economic contraction. The impact of the virus has been felt across various sectors of the economy, resulting in major changes in the housing market, international trade between countries, international oil prices, and drastic changes in the job sector.

The COVID-19 pandemic has significantly impacted the housing market in the United States, leading to both short-term and long-term effects. Before the coronavirus pandemic struck, the housing market thrived with low-interest rates and few homes for sale. Home sellers enjoyed the benefits of a solid market and many homeowners watched their homes appreciate, increasing their home equities. However, when the pandemic began, the housing market almost reached a standstill as buyers and sellers grew warier about actively engaging in real estate transactions due to economic uncertainty brought by the lockdown measures. In 2020, real estate sales dropped by 8.5 percent from 5.8 million in February to 5.27 percent in March (Glink and Tamkin 1). By April, real estate sales had dropped 18 percent to 4.33 million (Glink and Tokin 1). With home sales falling, the construction of new homes dropped by 15 percent to the lowest rate of new construction in almost seven years (Glink and Tamkin 1). The COVID-19 pandemic resulted in numerous Americans losing their jobs, contributing to the housing market’s decline.

Nevertheless, as the pandemic persisted, the housing market began to rebound. One of the most notable impacts of COVID-19 on the housing market has been the shift in housing preferences. With many people working remotely and spending more time at home, the housing market saw an increased demand for larger homes and outdoor space. According to Glink and Tamkin, there was an apparent mass relocation from urban centers as people moved from condos and rental units heading into the suburbs to acquire bigger and spacious homes with outdoor facilities by June and July (1). Additionally, with historically low mortgage rates, many buyers became incentivized to enter the market, leading to a surge in demand for homes in suburban and rural areas. In effect, home prices started to rise. Since the pandemic, real estate prices have risen 14.3 percent, with new home listings dropping by 27 percent and homes taking less time to sell (Glink and Tamkin 1). Due to the pandemic, fewer new homes were being put up for sale. In 2021 more people were looking to buy homes than there were, making it harder for people to find homes. As a result, home prices were projected to increase by a further 10 percent (Glink and Tamkin 1). Another effect of the pandemic contributing to fewer home listings in the housing market is the low mortgage rates that allow homeowners to refinance and stay in their homes instead of selling (Glink and Tamkin 1). All of this meant fewer homes were for sale, making it harder for people to find homes to buy.

Overall, the impact of COVID-19 on the housing market has been complex, with both short-term disruptions and long-term changes in housing preferences and transactional behavior. In the early stages of the pandemic, the housing market experienced a significant decline in activity. Buyers and sellers alike hesitated to engage in real estate transactions due to economic uncertainty and lockdown measures. As people continued to work remotely and spend more time at home, the for larger homes and outdoor space increased. Further, as the pandemic persisted, the housing market began to rebound, with many factors contributing to shifts in the market.

The COVID-19 pandemic has also significantly impacted globalization and international trade between countries. The pandemic has caused widespread disruptions in global supply chains, resulting in critical goods and services shortages. Travel restrictions, border closures, and quarantine measures have also impacted the movement of people, goods, and capital across borders. In their article, Nový and Jarý analyze the expected effects of COVID on individual globalization factors affecting the supply and demand sides of selected national economies and economic units. The COVID-19 pandemic affected the institutional preconditions of globalization, meaning governments became more involved in regulating international trade. National governments introduced stricter health and safety standards to reduce the spread of the coronavirus, which became barriers to international trade (Nový and Jarý 7). Additionally, the pandemic led to the closure of national borders, completely paralyzing the internationalization of businesses.

In the globalized economy, national governments often had to work with many interest groups to make decisions, but their actual influence on budgeting was minimal. However, COVID-19 temporarily weakened the power of interest groups, including transnational corporations, due to the closure of national economies, making lobbying or financing election campaigns by transnational corporations ineffective (Nový and Jarý 7). As a result, transnational corporations lost their ability to influence individual governments. Additionally, the COVID-19 mitigation measures imposed in individual countries resulted in the reassessment of cost-effective sectors of the economy. Therefore, governments reevaluated their expenditures on strategic reserves to support domestic production and achieve economic self-sufficiency. For instance, the pandemic highlighted the importance of domestic pharmaceutical and medical device production (Nový and Jarý 7).

The COVID-19 pandemic had a significant impact on international oil prices. The lockdowns and travel restrictions imposed by many countries in response to the pandemic caused a massive drop in global oil demand, leading to a surplus of oil and a sharp decline in prices on a short-term basis. According to Malliet et al., the drop in demand was further exacerbated by the pre-existing imbalances in the global oil markets, including poor coordination between OPEC and non-OPEC producers (873). Additionally, a price war between major oil producers, Saudi Arabia and Russia, further fueled the decline in oil prices. As a result, international oil prices were projected to drop by 50 percent in 2020 (Malliet et al. 873). As businesses shut down and people stayed home during the pandemic, the demand for transportation fuels, such as gasoline and jet fuel, plummeted. This significantly dropped crude oil prices as producers struggled to find buyers for their excess supply.

The COVID-19 pandemic profoundly impacted the job sector, particularly small and medium-sized enterprises (SMEs) and self-employment. The pandemic led to widespread business closures and reduced economic activity, resulting in job losses and reduced working hours for many individuals. According to Belitski et al., the social distance containment measures mainly affected the job sectors that relied on physical proximity, such as self-employed individuals and small businesses (594). Thus, the pandemic directly influenced self-employed individuals and small businesses more than employed individuals and large businesses in the United States and Europe. Despite this difference, the pandemic increased unemployment rates globally. In the US, there was a three million increase in first-time unemployment beneficiaries in the first week of May 2020, bringing the total number of applications to 33.5 million during the first three months of the lockdown (Belitski et al. 594). Furthermore, the number of active business owners in the US dropped from 15 million to 11.7 million between February and April 2020 (Belitski et al. 594). The situation was similar in the UK, as the pandemic affected employment. According to Belitski et al., the UK saw its unemployment rates reach its highest level since 2017 (594).

Moreover, the COVID-19 pandemic led to a significant shift in the nature of jobs, with a large number of Americans now working from home part-time or full-time. The change was driven by lockdowns and social distancing measures implemented to prevent the spread of the virus. However, the fact that 71 percent of Americans want to continue working from home even after the pandemic ends suggests that this shift may be more long-lasting (Glink and Tamkin 2). The pandemic forced companies and individuals to adapt to remote work and digital communication, and many have found that they prefer this new way of working.


The COVID-19 pandemic had a profound impact on the global and United States economy, leading to significant changes in the housing market, international trade between countries, international oil prices, and drastic changes in the job sector. Understanding the impact of the pandemic on different sectors of the economy can provide insights into how various industries and businesses have been affected and how they might recover in the future. This information can be useful for policymakers, investors, and businesses as they make decisions about allocating resources and developing strategies to navigate the ongoing economic challenges posed by the pandemic.

Works Cited

Belitski, Maksim, et al. “Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses.” Small Business Economics 2022: 594–609. DOI: https://doi.org/10.1007/s11187-021-00544-y.

Glink, I., and S. Tamkin. “Challenges and opportunities in the COVID-driven housing market.” The Washington Post (2021). ProQuest, https://login.proxy189.nclive.org/login?url=https://www.proquest.com/blogs-podcasts-websites/challenges-opportunities-covid-driven-housing/docview/2502075025/se-2?accountid=15152.

Malliet, P., Reynès Frédéric, Gissela, L., Hamdi-Cherif Meriem, & Saussay Aurélien. (2020). Assessing short-term and long-term economic and environmental effects of the COVID-19 crisis in France. Environmental and Resource Economics, 76(4), 867-883. DOI: https://doi.org/10.1007/s10640-020-00488-z.

Nový, Miloš, and Čestmír Jarý. Economic and Social Impacts of COVID 19 on National Economies from the Point of View of Economic Theory. vol. 92, EDP Sciences, 2021. ProQuest, DOI: https://doi.org/10.1051/shsconf/20219201036.

Measures to Inflation in the UAE From a Social Perspective

Inflation brings both economic and social problems to a country. All its effects mostly hit the low class, the largest group in most countries. Dealing with the social impacts of Inflation decisively needs the government to roll out social programs that will enable the communities to continue having better lives and support their own lives, Borrowing examples from countries that have best rolled out the social program to help tackle Inflation from a social perspective, UAE should consider putting its focus on subsidization of food costs, help the unemployed and also work on ensuring that low social class people have access to education. The paper will suggest which UAE has to intensify to tackle Inflation from a social perspective.

Subsidization is one way of ensuring that low-class people get basic needs during economic hardship. Better-performing governments have ensured they roll out social support programs to cushion the low class against skyrocketing food prices, electricity, water, and other essential commodities. The UK and EU, for example, continue to cap the cost of living by energy. In the last few months, they have invested $500 billion in energy subsidies, which target the low class to ensure that they have access to better prices for food, water, and electricity; this means a household will not pay more than $ 2880 for energy-related products(CNN,2022). Just The government in UAE is subsidizing food and energy prices to ensure that low-class people eat socially cushioned against the harsh economic times. The government has made several interventions to ensure that each household has access to fair prices for all products that are related to energy. The fuel subsidy program by the UAE government is provided every month, a subsidy equivalent to 85 percent; this is done at every fuel station and given to the head of the family (Ould,2020). Three hundred liters are issued. Food prices have continually hiked because they are directly linked to energy prices. UAE has put in a program where the government incurs 75 percent of food prices, and the beneficiaries registered to receive fuel subsidies are automatic beneficiaries of reduced food prices, too(Hassan,2023). The foods are available in specific hypermarkets.

Protection of the poor and the vulnerable is another way of keeping Inflation at bay. The soaring Inflation hits most households, which is likely to cause poverty because the purchasing power goes low as food prices increase; food constitutes more than 30 percent of the homes in the UAE. While several countries have attempted to evaluate the spending acts, there should be a subsidy which should be a reform to protect the poor and the vulnerable groups in the community. The government has effectively rolled out inflation allowance to almost 47 000 Emirate families to help them cater for food, electricity, water, and fuel (Al-Nassar, 2021). This is a social support program from the government for vulnerable groups. The program received a boost twice as earlier as the government pumped in DH 28 Million (Cherian, 2020). This program featured education, the elderly, and food, fuel, and electricity subsidies. Like in best-performing countries like the United States, Britain, and Canada, subsidies to poor families and the vulnerable should be efficient so that their social lives are bearable and not left to sink into poor social status.

Unemployment is a social problem; during Inflation, many people become unemployed, or their jobs are at risk; there are several approaches to ensure the jobless and those who risk losing their jobs are cushioned against hard times. While UAE is keen to provide cash transfers to the unemployed and subsidize food and energy prices, there is a need to ensure those in the low-income bracket and those who lose jobs due to shut down of industries where they used to work get compensation. Through the social support system like in Canada, the government ensures that those who lose their jobs in such times are given stipends that will enable them to survive. At the same time, the long-lasting solution to unemployment is being addressed. There are best examples of countries that have cushioned the unemployed and those who are rendered jobless as a result of Inflation. Low-income earners in Canada received a tax deduction in a program known as Canada Workers Benefit. This cost the government up to $1.7 billion. The affected by the close of businesses were equally compensated as the government rolled out plans to ensure they get absorbed into various forms of employment; this will reduce the poverty levels be y ensuring they have an earning to support their family’s various

Shelter costs remain elevated during the economic slump; the low class finds it hard to pay their rent dues because of the loss of jobs and other pressing economic issues. The latest report shows that apartment rents jumped by at least 23 percent in America, the same in Canada. To help the low class from this challenging situation, there is a need to have a support program to collect data and ensure that the vulnerable groups get shelter and are not harassed by landlords during such challenging times. A long-lasting solution to this effect is affordable housing units, enabling poor people to access affordable housing during tough economic times. However, a short-term solution should help the hundreds of people across the UAE who face the risk of moving to poor housing or being evicted from houses they cannot pay. Canada, in 2022 rolled out a social support program where low-income earners were granted $ 500 to almost one million Canadians at risk of the cost of housing (Jacob et al., 2022). This plan was targeted to help alleviate the social status and house those who could not due to social problems brought t in by Inflation. The same case can be applied in UAE to reduce the social impact of Inflation.

Education is one of the social aspects of society; it is very apparent that Inflation affected education either directly y or indirectly. Many countries have taken the initiative, making it possible for education instituting to continue operating and offer every learner a chance to get an education despite the rise of its costs. In Canada and the USA, such interventions have been made to ensure children from poor backgrounds d not struggle to access education at this time. Canada identified 13 provinces that will benefit from this social program focused on cutting the costs of early learning and childcare fees housing (Jacob et al., 2022). The program was intended to save low-income families from the high costs of keeping a learner in school by cutting it by at least 50 percent. Education is an essential aspect of the UAE; during this period of Inflation, it may be challenging for such families to take their children to school and meet all the financial obligations, taking examples from other countries of direct investment and subsidization of education costs.

It is apparent that Inflation has a social impact on any country; the success of a nation will therefore be gauged by how it addresses the problems that come with it socially because the social well-being of a country contributes to the better economic aspect of any nation. While UAE has rolled out various approaches such as subsidization, there is a need for it to benchmark from those countries that have done their best to socially protect its people, such as the EU, UK, Canada, and even America.


Al-Nassar, N. S. (2021). Can gold hedge against Inflation in the UAE? A nonlinear ARDL analysis in the presence of structural breaks. PSU Research Review, (ahead-of-print).

Cherian, A. (2020). The construction industry in the perspective of an economic boost in the United Arab Emirates (UAE). Int. Res. J. Eng. Technolpp. 9001, 270–276.

Hassan, A. A. (2023). FOREIGN DIRECT INVESTMENT (FDI) ROLE IN THE ECONOMIC GROWTH IN THE UNITED ARAB EMIRATES. International Journal of Economics and Finance Studies15(1), 17–31.

Ould Daoud Ellili, N. (2020). Environmental, social, and governance disclosure, ownership structure and cost of capital: Evidence from the UAE. Sustainability12(18), 7706.

Jacob, V., Chattopadhyay, S. K., Attipoe-Dorcoo, S., Peng, Y., Hahn, R. A., Finnie, R., … & Remington, P. L. (2022). Permanent supportive housing with housing first: findings from a community guide systematic economic review. American journal of preventive medicine62(3), e188-e201.

Laureen Kent, Ann. C (2022) CNN Business: UK, EU throw $ 500 Billion at energy subsidies https://edition.cnn.com/markets?utm_source=business_ribbon

Sebugwaawo. I (2022) Khaleejtimes ‘Inflation in UAE: Government disburses allowances to 47,300 low-income Emirati families’ https://www.khaleejtimes.com/uae/inflation-in-uae-government-disburses-allowances-to-47300-low-income-emirati-families

Industrialization in Communist China

Since China opened up and began to restructure its economy in 1978, its gross domestic product has grown by an annual average of nearly 9 percent, and more than 800 million people have pulled themselves out of poverty. During this same period, there have also been significant advancements in access to health care, educational opportunities, and other services. China’s economy has developed due to economic reforms, which have led to improved efficiency across the economy. This has resulted in increased production and more resources for additional investment within the economy. This essay will cover how the rise of communism in 1949 influenced the development of industrialization in East China.

The spread of communism throughout China during that time led to industrial development. Mao Zedong, head of the Chinese Communist Party, formally proclaimed that the People’s Republic of China had been established on October 1, 1949. Mao Zedong became a significant figure in the post-Revolutionary government of mainland China when the Nationalist government of Chiang Kai-shek fled to Taiwan, and he did so in his capacity as Chairman of the Chinese Communist Party (CCP) (Cheng). The 1950s marked the beginning of China’s entry into the modern industrial era on a considerable scale. Mao Zedong began implementing a “Five Year Plan” in 1953, modeled after the Soviet Union’s attempts at industrialization. The People’s Republic of China’s first attempt at an initiative of this magnitude to industrialize would be represented by this five-year plan. The terrible working circumstances imposed by industrial capitalism on urban working classes gave rise to communism as a response to these difficulties (Chen and Kung). Communism was an economic ideology that called for the abolition of private profit and the expansion of the state’s role in the economy. Workers were assisted by unions, which also acted as advocates for improved working conditions, pay, and benefits.

Many individuals were unhappy with the deplorable working conditions and the unfair distribution of wealth. New approaches to solving these issues have developed in the form of alternative economic concepts. The inequalities caused by capitalism inspired the rise of communism (Cheng). Under the communist economic system, all property and the means of production are owned collectively by the people. Some of the accomplishments that were a part of east china’s Revolution in terms of industrialization included modernization brought about by communists (Chen and Kung). China had five-year plans for its industrialization processes (Wen and Fortier). The exploitation of the countryside, rapid urbanization, and the bureaucratic and technological elite contribute to the problem. The radical economic and social shifts brought on by the Industrial Revolution, especially the struggles of the working class, gave rise to the ideology of socialism (Wen and Fortier). Although those factory owners and other entrepreneurs were amassing colossal fortunes, the standard of living for many workers worsened.

China remained poor despite about a century and a half of two failed attempts at industrialization; when communism came to power, the government stated, “It’s up to me now. You have all made some errors in judgment (Chen and Kung). Because capitalism is the root cause of poverty and inequality in China, it cannot be the solution to the country’s problems. Only a select few people or those in the top class become wealthy. However, most people continue to exist in impoverished conditions.” The Communists think that this should not be done. To industrialize China, there are further steps that need to be taken. In other words, communism came to power in about 1949 (Wen and Fortier). But despite this, China was still an impoverished country thirty years later. The year was 1978, and Deng Xiaoping had just taken over as leader of China following Mao Zedong’s passing the previous year. The question, therefore, becomes: why did China’s three prior attempts to industrialize fail? Is it possible that the market is not entirely free? Indeed, there was no such thing as a free market under communism.

On the other hand, this was not the case during the late Qing dynasty or during the time of the Republic of China. The Qing dynasty had much more robust protections for private property rights than their European counterparts. There is consensus among historians on that. In addition, during the time of the Republic of China, legitimate rights of private property were in effect. Therefore, the problem is not a lack of a free market in and of itself or private property rights. However, it was the absence of democracy under communism, which was not the case while the People’s Republic of China was in power (Wu). In addition, the shortage of natural resources is not an issue. Even though China has a relatively limited natural resource base, this is not the root cause of the country’s problems. Singapore, Hong Kong, Taiwan, and Japan are only some examples of countries that have effectively developed their industrial sectors while having relatively few natural resources (Wu). Therefore, on the other hand, a significant number of other countries have an abundance of natural resources. Those in the Middle East and even countries in Latin America were unable to undergo the industrialization process. So it would appear that the availability of natural resources is not a prerequisite condition.

In addition, efforts were made to press a campaign against anti-communist holdouts, bandits, and political opponents. The most significant amount of media attention was paid to Beijing’s deployment of soldiers to Tibet at the same time as it began its intervention in Korea. Because of the uniqueness and prestige of the Tibetan culture across the world, the communists expected this to be a difficult test of their ability to consolidate their control fully. In 1959, following occasional confrontations with the Chinese, the Tibetans rose in revolt, and Beijing responded with force to the Tibetans’ uprising (Wu).

In conclusion, after mainland China’s ” fall ” to communism in 1949, diplomatic relations between the United States and the People’s Republic of China were severed for several years. Communists invaded Beijing in 1949. The divide between those who owned the tools of production and those who did the actual labor was more comprehensive due to the Industrial Revolution. This would change when the proletariat, who had developed class consciousness, rose and overthrew capitalism. Currently, this isn’t the case.

Work Cited

Chen, Ting, and James Kai-Sing Kung. “The Rise of Communism in China.” Papers.ssrn.com, December 14, 2020, papers.ssrn.com/sol3/papers.cfm?abstract_id=3748521.

Cheng, Chu-yuan. The Economy of Communist China, 1949–1969Library.oapen.org, the University of Michigan Press, 2020, library.oapen.org/handle/20.500.12657/41818. Accessed October 29, 2022.

Wen, Yi, and George E. Fortier. “The Visible Hand: The Role of Government in China’s Long-Awaited Industrial Revolution.” Journal of Chinese Economic and Business Studies, vol. 17, no. 1, January 2, 2019, pp. 9–45, 10.1080/14765284.2019.1582224.

Wu, Yuan-li. “Industrialization under Chinese Communism.” Current History, vol. 39, no. 232, 1960, pp. 343–366, www.jstor.org/stable/45309931.