Pandemic Shock and the World after Crisis

DOI: 10.20542/0131-2227-2020-64-8-5-16
A. Dynkin (,
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation;
E. Telegina (,
Gubkin Russian State University of Oil and Gas (National Research University), 65, Leninskii Prosp., Moscow, 119991, Russian Federation

Abstract. Coronavirus pandemia of 2020 turned to be a strong external shock for the modern global financial and economic systems. It triggered a virtual cliff of many world markets, especially crude oil production and consumption. COVID‑19 also revealed serious shortcomings of public health systems and week governments’ preparedness to virus epidemics, as well as different degrees of the ability to overcome resulting crisis. Evidently, the world will eventually recover. However, the process will be slow and complicated. Deep structural and institutional changes will be needed. Coronacrisis accelerated many emerging trends and developments in technologies, labor markets, and corporate governance. Social isolation gave a powerful boost to IT, telecommunication, digital platforms, and gig economy. Remote work model demonstrated its efficiency for high skill professionals in financial, legal services, consulting and education. At the same time, low skilled jobs with limited remote access possibilities are likely to face growing troubles and declining incomes. This will further aggravate problems of inequality and lack of social cohesion. As for the international scene, there are already clear evidences of intensifying “bi-polar disorder” between USA and China. This is a highly dangerous trend that will seriously hamper the global post-crisis revitalization. As for the European Union, the coronavirus crisis highlighted the fragility of its currently existing architecture, namely the fundamental asymmetry between Europeanization of values and nationalization of interests. Attempts to convert values into a sort of formal regulations like Schengen or Maastricht naturally meet the challenge from deeply enrooted human identities. The EU needs either to make a decisive move towards unified budget or to rollback to more loose association. In the nearest future we will see what type of adjustment is politically feasible. During and after Covid‑19 crisis an underlying trend emerged for re-focusing business activities and consumer demand towards intangible, non-material production and consumption. The resources for this type of post-crisis development are intellectual and creative, as well as alternative non-carbon, thus they are basically renewable and unlimited. Summing up, the authors suggest that societal and economic growth trajectories will be shifting towards the paradigm of responsible development.

Keywords: coronavirus pandemia, economic crisis, black swans, economic growth rates, structural changes, anticrisis measures, financial stability, oil market, responsible development


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For citation:
Dynkin A., Telegina E. Pandemic Shock and the World after Crisis. World Eonomy and International Relations, 2020, vol. 64, no. 8, pp. 5-16.

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