COVID19 and Global Recession COVID19与全球经济衰退 英语作文.docx

COVID19 and Global Recession COVID19与全球经济衰退 英语作文.docx

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COVID19andGlobalRecessionCOVID19与全球经济衰退英语作文

COVID-19andGlobalRecession

COVID-19与全球经济衰退

Slightestthoughtsofrecessioncanbescary,however,itmaybebeneficialtounderstandwhatitisandhowwecangetthroughit.Covid19hasonceagainbroughtascenarioofglobalrecession.And,it’shigh-timethateveryone,fromstudentsorcommonersshouldknoweverythingaboutit.Let’sbeginwithknowingthebasicmeaningofrecession:

Whatisrecession?

Aneconomicrecessionisatimeperiodofeconomicdownfallordecline.Itissignalledbyamassiveincrementinunemployment,ahugedipinthehousingsectorandadeclineinthestockmarket.Officially,aglobalrecessionisnotdeclareduntiledtheGDP（totalvalueofgoodsandservices）declinesfortwoormorethantwoquarters.

RecessionduringCOVID-19time-period

Thoughtherearevariouslessonsthatcanbelearnedfromglobalrecessionsthateverhappened,yetthereisabigdifferencebetweenthepreviousonesandtheCOVID19recession:

Noneoftheseeconomicdownfallswerebroughtdownbyaworldwidepandemic.Anothercrucialthingistounderstandaboutglobalrecessionisthatitismerelyanormalpartoftheeconomiccycle.AspertheNationalBureauofEconomicResearch,anaverageexpansiontimeperiodstaysupto59months,oronlyoffiveyears.Forinstance,thelastmajorglobalrecessionendedinyear2009.Itsrecoverywasstartedinthemidstof2011.Thisisthereasonwhymostlyeconomistsclaimedthatwewereoverdueaglobalrecession,evenbeforewegothitbynovelcoronavirus.

EconomicDownfallsofGlobalRecession

Everyoneknewthatthecyclicalnatureofeconomicgrowthandbusinesseswouldputusintoanotherglobalrecession.Whateveryonehasnoideaaboutwasthatitwouldcoincidewithaonce-in-a-hundred-yearworldwidepandemic.Thispatheticanddauntingcombinationhasgivenbirthtoeconomicdownfallsofnear-historicproportions,suchas:

Unemployment:

OnlyintheUSA,morethan38millionpeoplefilledjoblessclaims.Thishappenedonlyduringthe9weekperiodstartingfrom12THofMarch.MarchsawonlytheinitialphaseofCOVID-19.Thisfigurehasnoormayhavejustaslightmentionoffreelanceandgigworkers,whocouldnotregisterforunemploymentclaims.Also,thepeoplewhofacedmassivecutsintheirsalarywerenotcounted.

*Stockmarket:

DowJonesexperienceda2,997pointdrop,thelargestinits123-year-oldhistory,onMarch16.It’simpossibletoknowwhetherthestomach-turningdropsinthestockmarketareduetothenovelcoronavirusorabullmarketthathasrunitscourse.

*Housing:

AspertheNationalAssociationofRealtors（NAR）,thetotalhousesaleswereexpectedtodeclineby39.5%inthesecondquarterof2020.ThesenumbersareexpectedtohaveariseaftertheCOVID19getsaway,butcurrentlytheyareunfortunaterealityaddingtotheglobalrecession.

GDP:

MillionsofAmericanswereshelteringinplace,hundredsofbusinesseswereshattered.AllthiswasreportedinMarch31whenGoldmanSachseconomistspredictedamajor34%dropinGDPintheupcomingmonths.

*Consumerconfidence:

TheGlobalConsumerConfidenceIndexsurveysshowthattherearemorethan17,500adultsbelowtheageof75inaround24nations.TheGlobalConsumerConfidenceIndexofJunewas40.0,8.7pointsbelowthanthenumberofJanuary,andthisisproblematic.Thissituationoccurswhenconsumersspendlessduetoinsecurityandeventuallyslowsdowntheeconomyasawhole.

WhyGlobalRecessionoccurs?

Economistsholddifferentopinionsonnumberofrecession.AsperthevariedviewstheUSAiscurrentlygoingthrougheither45thor47theconomicrecession.Theremarkablepointisthatnoneofthetworecessionshavebeenexactlysame.Butthefactorthatarestillcommon,includes:

Highinflation,highinterestratesorboth:

Highinterestratesrestrainttheamountofmoneyavailableforborrowing.Thiscanindicatethestartofaglobalrecession.Ontheotherhand,inflationisbasicallyasituationwhereinthepricesofdailygoodsandserviceslikegasoline,groceriesandotherconsumeritemsseeahighrise.

*Realwages:

Theterm“realwages”isgiventotheextenttowhichourincomecanstretch.“Realwages”don’tbuyasmuch.Forinstance,ifsomeoneearns$50,000inKalamzoo,youcanbuyahouseandhaveacomfortablelife.Thesame$50,000isnotgoingtogiveafairlycomfortablelifeinLasVegas.Whenrecessionbegins,therealwagesbeginstoshrink.

Whenrealwagesstarttoshrinkitinstigatesfearinconsumersandtheyloseconfidence.Thisisbecausetheyrealizethattheirincomeisnotinpacewithinflation.Theyeventuallystoptheirregularspendingpattern.Allofthisendsupinanoverallslowdown.Infact,oneofthereasonstheU.S.governmentpasseda$2trillionstimuluspackageinMarch2020.ItwasdonetokeepAmericansspendingmoneyandtheeconomychuggingalonguntilthenovelcoronavirusthreathaspassed.TheSenatemayhavetothinkaboutanotherstimuluspackagebytheendoftheyear.

Whatpeoplefaceduringaglobalrecession?

Haveyoueverseenorimaginedasnowballgrowingbiggerasitrollsdownahill?

Ifnot,tryimaginingit.Becauserecessiongatherspowerjustlikeasnowballgoingdown.Oneafteranothereconomicindicatorgetstrappedinaglobalrecession,andhereiswhatfollows:

GDPfallsdrastically

*Businessescutbacktheircostsinordertosurviverecession

*Whencompaniesdocost-cutting,itleadstolayoffs.

*Peopleseemassivelayoffs,manygetunemployed.Thisinstigatesfearinpeoplewhoarestillemployedandtheystartsavingmore.Allthisultimatelyresultsinlessspending.

*Assetslikehomesandstockslosevalue.

*Governmentdebtincreaseswhenittriesstabilizetheeconomy.

*TheFederalReservecutsinterestrateswithaviewtostimulategrowth.

DifferencebetweenRecessionandDepression

Youmayalreadyhaveanideathatdepressionisscarierandseverethanarecession.Wewillseeabasicdifferentiationtoseeisitlikethat.Generally,arecessionindicatescontractionofaparticularphaseofbusinesscycle.Whenglobalrecessiontakesplaceeverythingslowsdownforatime-periodofatleasttwoquarters.

Inoppositiontothis,adepressionisahugeprolongedtime-periodofglobaleconomicdownfall.Duringdepression,majoreconomicindicatorsfacedecline.Forsummingup,wecansaybothofthebelow-listedfactorssetarecessionapartfromadepression:

Severity:

Wheneconomicindicatorscontract（orweaken）fortwoquarters,itisconsideredarecession.Adepressioncauseseconomicindicatorstodeclinemoresignificantly.

*Length:

Adepressionisdeeperandlastslongerthanarecession.Forexample,theGreatDepressionof1929lasted43months,whereastheGreatRecessionlasted18months.

Howlongdoesarecessionlast?

AlthoughtheGreatRecessionlastedfor18months,itwasunusual.Ifyoutakeitoutoftheequation,theother10recessionssinceWorldWarIIhavelastedbetweensixand16months,oranaverageof10.4months.It’simportanttonotethattheU.S.economyfallsapartandrebuildsitselfquiteregularly.WhatsettheGreatRecessionapartfromotherrecessionswashowlongittooktorebuild.Thesamemaybetrueofthecurrentrecession.

WorstGlobalRecessioninHistoryThatEverHappened

BeforethecurrentCOVID-19recession,theGreatglobalrecessionof2007-2009wasconsideredasthemostseveredownfalleveroccurred.TheIMFrankeditasthesecond-worstdownfallintheexistenceofmankindafteronlytheGreatDepression.Therecessionof2007-2009wasfueledevenmorewhentheU.S.realestatemarketcollapsed.Itwascausedbyasubprimemortgagecrisis（whenbanksgivemortgagestothosewhowereclearlynotinastatetorepaytheloan）.

Justlikethepresentfinancialcrisis,theGreatRecessionwasalsoaperfectstormforadownfall.Thesubprimemortgageswererecordedasthefirstsnowballatthetopofthehill.Manyhomeownerswhohadgottenintheirheadsbecamedefaultersinpayingofftheirloans.Defaultsdottedtherealestatemarkethugely,andhomevaluesplummeted.Eventhosewhowerenotkeepingupontheirmortgageslostequityallofasudden.Whenworriedinvestorsstartedsellingoffinahurry,thestockmarketgotaffectedseverely.Ultimately,thebankscollapsedandmuchoftheglobaleconomygotsuckeddown.

Recessionanditsaffectonanaverageperson

Therecessionwillaffecteveryoneinsomeorotherway.Thosewholosetheirjobshavedirectimpactofglobalrecession.Thosewhodon’tloseit,arelikelyatriskoflosingvalueoftheirretirementaccounts.Somehavemassivepaycutswhileforsomethevalueoftheirassets,stocksorhomeswouldbemuchlessthantheywerebeforetherecession.Whenmorepeoplestartlosingjobs,therewillbeariseinbankruptciesandforeclosures.Thismeansthatsomeofthehomesaroundyouwillstandempty.

Oneofthemostlong-lastinginfluencesofarecessioncanbeemotionalaswell.TherewasastudypublishedintheClinicalPsychologicalScienceshowedthatthosewhofacedahouse-related,job-relatedorotherfinancialhardshipduringthe2007-2009recessionaremorelikelytogetsignsofanxiety,depressionanddrugyears.Thiscanhappenyearsaftertherecession.

Eachandeverypersonisnotalwaysdirectlyinfluencedbytheeconomicfalloutfromarecession.However,everyoneislikelytoknowsomeoneisfacingdirectimpactofglobalrecession.

Dohousepricesalwaysdeclineduringarecession?

Aonewordanswertothesequestionwouldbe“yes”.Foralotofpeople,housepriceswillreduceinthetimeofrecession.Inordertoforeseetowhatextentthehousepricescoulddip,therealestategiantRedfincarriedoutaresearch