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March 22, 2021

US economy experiences the deepest recession of all times – leading macroeconomic influencers

Economists believe that the US government could not entirely prevent the GDP decline triggered by the Covid-19 pandemic.

Economists believe that the US government could not entirely prevent the GDP decline triggered by the Covid-19 pandemic but it is gradually recovering from the plunge.

John Ashcroft

John Ashcroft, an economist, shared an article about the Covid-19 pandemic bringing economic activity and regular life to a standstill in the US, with the lives of the youth pursuing their education being the worst affected.

The country recorded more than 125,000 coronavirus related deaths since the Covid-19 outbreak in March 2020. The economy was sliding into a recession even before the first lockdown, as GDP dropped 7% in March contributing to a 2.9% fall in the first quarter of the year, which is being observed as the biggest fall since the three-day week of 1974.

In April 2020, the GDP plunged to a further 18% as the economy closed. This contributed to the 19% slump in the GDP in the second quarter of the year, the biggest drop on record.

However, since Covid-19 restrictions were lifted in May, the economy reported growth in the six upcoming months.

Although being regarded as the ‘worst recession for a very long time’, the label is likely to remain, given the current estimate of a 9.9% GDP fall last year will be revised lower as more data is received and analysed.

The big recovery questions, however, are whether consumers have enough money to spend, and if there will be enough jobs in the coming months.

 

Armine Yalnizyan

Armine Yalnizyan, a Canadian economist with the Atkinson Foundation, shared an article on how the ongoing pandemic has highlighted the differences in working conditions between teachers and childcare workers.

Since the Covid-19 outbreak, educators, teachers and school officials in New York asserted that schools are not baby care centres and teachers cannot be used as baby-sitters. With some teachers being given the work-from-home option during the pandemic, baby care homes were used as schools for American children, who did not have access to online learning.

It was reported that childcare workers managed the children in the same classrooms which were shut down for teaching in view of the rising coronavirus infections, amid concerns raised by teachers’ unions. The glaring disparity in the treatment of teachers and childcare workers brought to the forefront the discrimination in treatment being meted out to the latter, and them being deprived of basic rights granted to employees.

Many childcare centres were forced to remain open during the peak of the Covid-19 pandemic, as operators of childcare centres feared that the federal government would not reimburse them if they suspended their operations. Childcare experts stated that the American Rescue Plan, which apportioned nearly $40bn for the industry, provided some relief to these workers.

Atif Mian

Atif Mian, a professor of economics at Princeton University, shared an article about the coronavirus pandemic highlighting the need for aggressive funding into basic science. The drug manufacturing company Pfizer and BioNTech, which are making the Covid-19 vaccine, are ready to use the once abandoned synthetic mRNA (Messenger RNA), in the coronavirus vaccine doses.

The prospects of the synthetic mRNA technology jeopardised scientific careers yet raised hope that it could play a pivotal role in the manufacturing of Covid-19 vaccine which is expected to restore normalcy into the world. Many more drug makers such as German biotech firm CureVac also developed experimental mRNA vaccines for coronavirus.

Experts claim that the value of mRNA, which was abandoned for decades, by scientists and governments alike, should remind the governments of the need to apportion substantial funds for research and development (R&D) into science and technology.

 

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