Economists believe that managerial practices have helped economies in cushioning large economic shocks; and although it is too early to study the effects of managerial talent on the Covid-19 crisis, it has highlighted the need for swift reorganisation of tasks and logistics.
Linda Yueh, an economist, shared an article about how managerial practices influence the ability of economies to weather large shocks such as the Great Recession and the more recent Covid-19 crisis. The article draws useful insights from the Great Recession to understand how to build managerial talent and logistics in cushioning economic shocks from crises such as the coronavirus.
Research suggests that countries with a higher quality of management prior to the Great Recession were able to limit employment losses by moderating real wage growth, the article noted. However, economists also believe that the effect of management quality on macroeconomic outcomes could be quantitatively different for Covid-19 and its recovery, but qualitatively similar.
The Covid-19 crisis has highlighted the importance of the swift reorganisation of tasks and logistics to cushion economic shocks. This implies rapidly deploying teleworking and online services, reorganising supply chains, and supporting firms to preserve skills, production, as well as market shares.
Many studies have suggested that effective managers respond to exogeneous microeconomic shocks by reallocating workers to preserve, develop and utilise workers’ skills, maintain their incentives and satisfaction, and preserve productivity, the article detailed.
Research finds that countries with a higher quality of management before the Great Recession have been more able to limit employment losses. This was achieved through the ability to moderate real wage growth. https://t.co/dNDBAYvuO6
— Linda Yueh (@lindayueh) December 6, 2020
Felix Salmon, a chief financial correspondent, shared an article on the perils of mass transit facing huge service cuts across the US due to the Covid-19 crisis, and the effects on local gross domestic product (GDP). According to economists, the rationale for cities is that people stay close to carry out their economic activities and do not spend most of their time on travelling. However, if transit networks are diminished in a dozen or more centres of economic output, then it could impact the national economy, the state.
Transportation systems across the US are facing huge financial losses set off by the pandemic and reduced ridership. They also fear that the pandemic cripple service for months and years to come and are therefore pleading to Washington for assistance. While Boston shut down its ferries and commuter rail services, Washington eliminated its late-night metro service, Atlanta its bus service, and New York City announced plans to slash its subway service by 40% and commuter rail service by half.
Apart from the fact that transportation systems such as buses and trains allow people to commute to key business areas such as restaurants, hotels and stores that have already been battered because of the virus outbreak, the collapse in transportation agencies have hurt low-income riders and minorities the most, as they are the largest users of buses and subways, the article noted.
What’s the best source for quantitative estimates of the effects that transit cuts have on local GDP? https://t.co/jdcPuUXkK5 pic.twitter.com/sMOvanEMuk
— Felix Salmon (@felixsalmon) December 6, 2020
Ian Bremmer, a political scientist, shared an article on the European Union (EU) going ahead with the $909bn fund, despite Poland and Hungary having vetoed its proposed Covid-19 economic recovery bill last month. In spite of the two eastern EU states having objected to EU’s provision to disburse funds to the bloc through 2027, Ursula Von der Leyen, the EU president intends to pass the bill even if the veto is not lifted at Brussels on December 10.
The states say that they are not backing down from their decision and waiting for Germany – which holds the rotating presidency of the Council of the European Union till the end of the year – to compromise. Until then, the current political deadlock continues, the article noted.
#WhatWeAreWatching: Mired in budget crisis after Poland and Hungary vetoed the European Union's proposed pandemic economic recovery bill, the EU says it will go ahead with the 750-billion-euro fund anyway. @gzeromedia https://t.co/vhu87Ylydu
— ian bremmer (@ianbremmer) December 6, 2020