I would attempt to put together my views about the basics of economy. Everyone across the globe are worrying about the economy in the pandemic covid19 period including me. The outcome of it could be recession. Yes, the situation is evidencing the recession. Few countries, long time ago printed more currency and distributed to the citizens of the country.

The result is currency lost its value and huge inflation. What is the solution? Can we solve the problem permanently? If not, what could be the temporary solution? Before discussing about the solution lets discuss about problem.

Recession vs Economy:

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A country has 100 citizens and assume government got printed 1000 bucks to distribute. The challenge for any government is how quickly rotate the money effectively in the system. 1000 bucks must get touched the hands of 100 citizens and rotate back. Eventually, it is effective and healthy economy. If the money stuck somewhere, it is called recession. Apply the concept to the total population of any country. Why is it getting jammed?

For instance, out of 100 people 50 people are producing products for the need of 100 people. Based on the demand few people get more money and the rest get less for their products. 50% may not get good money as they are not producing any products. Apply the concept to the total population of any country. These differences create financial status of individuals in the society and economic imbalance for the country.

Tradeoff:

The Trade off between products can create a good economy. For instance, I am good at producing Rice and wheat, another person is good in producing apparels, another one is great at constructing a house. The trade off between these three can create a wealthy society. Apply the same concept to a nation.

Tradeoff between countries can also keep a wealthy economy. Exchanging one another can fulfill the need and keep the balance in the system. A person / a country may not be in a position to produce everything they need to survive. A healthy exchange can create a wealthy economy. We are calling it a globalization.

Governance and it measure:

The economic imbalance has to be taken care by government with continues monitoring and analysis consequently, the growth and degrowth can be handled in any pandemic situation.

Pandemic covid19:

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What is mandatory for our basic living?

1.Healthcare

2.Food and groceries

3.Transportation

Now, Let’s talk about the covid19 and its impact. Majority of the people paused investing / buying other than above three categories because of three things insecurity, unavailability and accessibility. It’s the time to establish startups and develop products in above three categories as many as possible. People accept them, invest in them and encourage them.

The takeaway:

1. Currency has no value when the need of products is not fulfilled.
2. Majority of the people should be creative enough to create products.
3. Usually, money stuck in the system due to three reasons. Product unavailability, scarcity and lack of creativity.
4. Government should monitor and take necessary action to encourage / discourage the production based on the money blockage.
5. We need to understand the country’s healthiness of economy is measured on GDP (Gross domestic product).
6. Covid19 pandemic is one more threat will pass over very soon.
7. We always need to understand two things either need create demand or supply based on the demand.
8. We need more entrepreneurs to create products and fill the gap of financial status in the society.
9. Globalization is needed with few limitations.
10. Basics of economy is money rotation in the system which is the prime responsibility of any government.

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