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