How does the economy work in a health crisis?


By CAPosts 21 November, 2020 - 07:00am 34 views

(Expansion) - Every day we go into a frenzy of paranoia about any slight symptom that makes us believe that we have the dangerous and unwanted SARS-COV2. I assure you that they have thought about it more than once or have even asked themselves if they have already gotten sick and never knew it or if they have immunity and a cure in their hands. Since the news that was decreed as a pandemic, it turned into a crisis, and not only in health, it has affected every sector of the economy and of course it has had an impact on every family. The news quickly flooded us at the beginning of the year, which has led us to believe that we are experts in the field of health, it seems that we are living a zombie-style movie or those catastrophic that predicted the end of the world, seeing every day how we go out covered from head to toe, we disinfect every space we touch or have even learned to live together through our mobile devices; It has brought us a change of life

The world was practically paralyzed for a year, we have marked a before and after 2020, but there is still much to do and not only in terms of health, since we are not the expert epidemiologists or much minus Will Smith coming to save humanity. This year has seen enormous changes, from an improvement to the environment, a fall in the price of oil, a stock market crash and the closure of thousands of companies. One of the big concerns after COVID-19 is undoubtedly the economy, I explain why. Let's think about our current economic situation, we can be so lucky to have a salary and continue with the home office, and despite that financial security we are facing an economic problem, the expenses increased; You probably resorted to panic shopping and stocked your pantry with canned goods, water, and even toilet paper. Idleness has caused you to spend hours on the web shopping and every week you see your long-awaited packages arrive that one by one they have accumulated, some even without having been opened; you had to buy products to improve work at home; Maybe the point has come where you wanted to get in shape or some recreational activity by filling up on video games. All this indicates that you live a comfortable life, even so, your expenses increased, credit cards are at the top and you felt that your productivity decreased; however, this is the best case. In contrast, there are families that do not enjoy this economic stability, and perhaps we criticize at some point that they will not stay at home despite the recommendations, but we must put ourselves for a moment in their shoes, the vast majority of the Mexican population has a informal work, that is, they live from day to day as we say it colloquially. OPINION: The economy in times of COVID-19 It means that if they do not go to work they will not have money to meet basic needs and I do not mean to pay the bills to watch movies or listen to music, but real needs, food, house, education and even health. Not all of us have the same privileges and for many, acquiring mouth covers, gel, mats and other recommended products means stopping eating. But how does the economy work in a health crisis? First, let's remember that the economy works like a poker game, if someone has your card you will no longer be able to make the movements you expected and you will have to change your strategy.

Let's imagine a night in Las Vegas, it sounds fun but very risky despite being a great expert, why? Simple, you don't know if you are going to win or lose, it is a risk that you certainly have to take; In the economy it is the same, everything is about throwing a dice in the air and hoping that luck is on your side, the experts call it probability, just like that the Stock Market works, investments, companies, in a few words we are living a game of dominoes: if we stack all the tiles and one falls, they will all fall, unless we stop that fall with our hand. This hand in economics is called the invisible hand and it is about market regulation, but what does all this have to do with the crisis we are experiencing? OPINION: Is money a means or an end of economic growth? There comes a point in Las Vegas that you have to change cards to win, these strategies are what Central Banks around the world must use, from inflation adjustments, dollar auctions, price changes, placing or withdrawing money of circulation, rethinking interest rates, among others, with the sole purpose of avoiding an economic collapse. This crisis that we are facing is due to the fact that we confine ourselves at home, the companies stopped their production, but continued to pay wages until their finances were compromised and even closed. On the other hand, we change our usual consumptions and stop buying everyday products, by decreasing these sales, therefore, companies have less income, resorting to the dismissal of people and these in turn are left without a salary. OPINION: Are remittances the lifeline for the economy in 2020? On the other hand, let us remember that it is a global disease that has limited international trade, and in turn the shortage of products has caused prices to increase exponentially, causing quite critical economic fluctuations. We are going through a situation where we have all got sick of our pockets and that will only depend on the good management of our personal finances to continue betting on this game and above all to support trade in order to move the economy in our environment, as well as to encourage production with the purpose of creating jobs. OPINION: On the way to a distressing end of the year We are betting the best hand we have in that game of chance, the strategies are already in the air, now it will only depend on the house, and that is us with the care of our health. Editor's note: Erendira Yaretni Mendoza Meza has a degree in Economics, a Master's degree in Government and Regional Development from the Colegio del Estado de Hidalgo and a PhD in Social Sciences from the Universidad Autónoma del Estado de Hidalgo. She is a professor at the entity's highest house of studies. Follow her on Twitter and / or on Facebook . The opinions expressed in this column are those of the author. See more information about this and other topics in the Opinion channel