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Assignment 3.docx - 1.0 Introduction On January 2020, the...

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1.0 IntroductionOn January 2020, the world was shocked by the World Health Organisation (WHO)announcement of pandemic due to corona virus disease (COVID-19) outbreak. It hasaffected almost the whole part of the world and caused a lot of death. The virus whichstarted in the one part of China has now spread all over the world that made it not onlyChina issue or Asian issue, but a global issue. Since the virus is spread through closecontact, one of the crucial ways to avoid it is, by practicing a social distancing betweentwo individuals. This new norm however has affected many parties such as people ineducation line, planned events and not to forget businesses including international trade.Companies across the world are affected by how fast the disease can spread untilsome of them surrendered and shut down their businesses. With transports beingrestricted and limited, and interruption to production, the global economic unfortunatelyhas slowed down. Export and import process has experienced the same thing too sincesome countries still does not open their borders and affect the businesses transaction. This article that I have chosen will take us to see what are the affects of COVID-19 tothe global, and the simulation they have made using G-cubed model to assume whatmight happen in the future and the solutions that they can suggest in order to overcomethe issues.
2.0 Review of ArticleThis article titled “The Economic Impact of COVID-10” written by Warwick McKibbinand Roshen Fernando tell us about how COVID-19 outbreak can impact the world as awhole. In paragraph one, this article shared history of COVID-19 and how it started andspread which then lead to an announcement from World Health Organisation (WHO)declared COVID-19 disease is a pandemic.This article then discuss about how corona virus have several impacts in economicactivities of the world. Most of us probably knew that China is one of the largest exporterto almost every country in the world. Since many of the products and factories were fromthere, to some extent, slowing down in China’s economy along with the interruption toproductions also means a disruption to world’s supply chain. This is because countriesaround the world are dependent upon China and they started to experience problems intheir production too. Moreover, numbers of transport that is allowed for exportingpurposes also has been limited and restricted. Uncommon consumption patterns madeby some panic consumers also bring no good since the global’s market stock continue tofall.McKibbin and Fernando have decided to make a simulation on seven scenarios dueto the spread of COVID-19 using a G-cubed model. Basically, G-cubed model is a hybridof dynamic stochastic general equilibrium models and computable general equilibriummodels and was developed by McKibbin and Wilcoxen (1993,2013). They are using thesame way of approaching simulation on the economics during SARS and influenzatowards the simulation of the economic during COVID-19 outbreak. There are seven

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