Economics

Our world today has a substantial problem, Coronavirus. Covid-19 is a deadly virus that is a threat to humanity's health. However, health is not the only area Covid-19 will effect. The pandemic has resulted in changing the global value chain altogether. It has impacted the world's economic centers, including China, the United States, and most European countries. The industrial production in these countries has reduced at a significant level. The implications coming from this pandemic have decreased international production networks and also have a widespread impact in different areas. During the previous decades, the manufacturing sector has changed into a global value chain network. All the goods are now produced globally in different regions.

In this scenario, the world needs to participate in the production as a whole. However, with the pandemic, the transportation of humans and goods has been limited. This situation has a direct impact on supply and demand. According to the concepts learned during the course, it can be said that supply and demand are influenced mainly because of public opinion and changes. When the consumer marketplace is going through a significant change, it can directly affect the supply and demand value chain. There are many intermediary goods produced by China, and because of being the epicenter of the epidemic, it was complicated to meet demand and supply needs.

The data coming after the global lockdown indicates a visible difference in industrial productions. The productions have dropped to a severe level where it is necessary to understand the long - term perspective. China's position in the global value chain and other significant countries indicates that the production's decline has a direct effect on trade flow. The imports in most of the states have been decreased along with the export. This situation is a clear demonstration of changes in supply and demand. The trade was already going through issues because of the disputes occurring between China and the United States. The world's most critical production parts have been missing due to the reduction of imports from China. The data indicates that industrial production has diminished, and it is not easy to get hold of the textile, electronics, and computing sectors of manufacturing.

The restrictions placed on the supply chain of multiple countries are made to reduce the spread of the virus. This circumstance results in a reduction in demand. The imposition of these restrictions on the transportation of people is because of the concerned related to the safety and health of people. This circumstance resulted in factory closures, which hurt the global supply chain operations. During this complete pandemic, there are a lot of negative consequences faced by organizations.

Consumer demand has also reduced in the market due to a lack of capital. The overall world economy is having layoffs and downsizing, where multiple people are losing their jobs. This situation is a significant part of the economic contribution that is withdrawn from the marketplace. The decrease in consumer demands has also increased the risk of global manufacturing. Affecting is also reducing because people are not demanding products at the same rate. This situation is causing lots of damage to operations for the supply chains. This is not just limited to trade and production, but the investments. The capital outflow from the emerging markets is recorded where many organizations require emergency financing. This collapse in demand results in decreasing industrialized economies and the developing countries have to go through the process of divestment, which will have a long-lasting effect on global production. This is not just a temporary disruption in supply and demand.

According to the principles of supply and demand, there is a downward shift experienced in that demand and supply curves. The equilibrium between both forces has been disturbed because of adverse economic conditions on the global level. Still, many limitations are implemented. The two main drivers of price and quantity are profoundly affected because of these changes. These are opposing forces that are invisible but play a significant role in shaping the market conditions. The curves are mainly affecting the social and political effects. These pressures are coming from social forces, and unemployed individuals play a significant role. The local governments are under pressure. Both demand and supply are interconnected because there are constant changes in the market. The entire economy is getting affected. In these events, the government should intervene to stabilize the market (Gordon, 2000). They can implement concepts such as price floors and price ceiling.

The government can revoke various tariffs and introduce taxes to stimulate market conditions. However, these changes are subjective to the market conditions of every country. To maintain price in the supply and demand, the government can implement price lower(?) so that prices do not fall to a certain level. These limitations on the pricing can create a balance between supply and demand. The government should also regulate unemployment in a way that organizations do not make excessively layoffs. These types are fundamental to stabilize the situation. After all, the global economy must avoid long term distress. The policy responses should be quick because the world economy has already suffered a lot.

Conclusively, existing economic models must be re-examined according to the current financial situation. The production of goods should be regulated by the government while rethinking about the approaches of international outsourcing. The production level is affected on a global scale, which is resulting in avoiding the future supply. Also, the resilience in the supply chain must be increased. The growth of the supply chain should be revisited to ensure independence in quantities. Higher-level policymakers can play a significant role here because they have a better understanding of the situation.

The spread of production for global companies is being reconsidered to maintain supply and demand. It can optimize all the operations while minimizing the cost and reducing the withheld inventory. Asset utilization should be regulated in all the organizations so that economic factors can maintain their position. Global shock can only be removed by enhancing stability and reducing vulnerability in the relationships of supply-chain. This situation and further reflect on the companies' risk assessment for their future and relocating their production resources so that a global crisis such as Coronavirus cannot affect supply and demand patterns.