Effects of the Covid-19 Pandemic (Essay Sample)

Effects of the Covid-19 Pandemic
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Effects of the Covid-19 Pandemic
There is no doubt that the COVID-19 pandemic has impacted nearly every aspect of our lives. From wearing masks to social distancing, to constantly washing our hands and keeping them sanitized, to working from home and staying indoors, the world has witnessed a massive shift in "normal business" due to the COVID-19 pandemic (Fong et al., 2020). However, one of the notable effects of the COVID-19 is its impact on commodity prices, which will be examined in this paper to better understand the cause-and-effect relationship between the COVID-19 pandemic and the changes in commodity prices. In fact, due to the pandemic situation, all the basic essential things price went up.
While Jain (2014) notes that changes in the demand and supply of products often affect prices, the COVID-19 pandemic has had a massive impact on the two, affirming why there has been an increase in commodity prices. Basically, the COVID-19 pandemic is considered the root cause of the latter changes in the demand and supply and consequently the prices. In fact, Del Rio-Chanona et al.(2020) note that there existed a great deal of uncertainty at the beginning of the pandemic, which led to an increase in the demand for specific commodities like toilet paper. With time this increase in the demand made the essential-commodity prices to spike, affirming that the latter pandemic caused price increase. On the other hand, Del Rio-Chanona et al. (2020) also note that the COVID-19 pandemic resulted in supply disruptions, causing a substantial increase in commodity prices. In fact, food prices in August 2020 were 5.5% higher than in August 2019 (Del Rio-Chanona et al., 2020).
As initially mentioned, the COVID-19 pandemic has had numerous effects on the U.S the global economy and a rise in the prices of essential commodities like food is one of the notable effects. With more people at home due to the COVID-19 pandemic, the overall demand for essential food products had to increase, triggering an increase in their demand (Mead, 2020). Eventually, this increase in demand led to a rise in the general prices of food products. A recent article by the Bureau of Labor Statistics indicates that the food price index increased by 1.5 percent in April 2020, following a 0.3-percent increase in March the same year (Mead, 2020). While the prices of meat products rose by 4.3%, those of cereal and bakery index increased by 2.9% between March and April 2020 (Mead, 2020). The latter article further notes that the Consumer Price Index of food taken at home increased 3 percent during the same period due to the COVID-19 pandemic (Mead, 2020). At the same time, import restrictions due to the COVID-19 pandemic also affected the supply of food products in the U.S, increasing food prices.
Another effect of the COVID-19 pandemic associated with the increase in commodity prices is the change in the lifestyle to staying home. Before the COVID-19 pandemic, many people loved to spend time outdoors. However, due to the pandemic and the subsequent increase in the prices of commodities and services, many people have switched to remaining indoors, considering that an outdoor lifestyle has become more expensive (Brodeur et al., 2020). Although movement restrictions did contribute to the above change in the lifestyle, commodity and price increases due to the pandemic also significantly affected the change of individuals' lifestyle to staying at home (Brodeur et al., 2020).
Further, a reduction in consumption is the other effect of the COVID-19 pandemic associated with an increase in the prices of commodities. While the COVID-19 pandemic led to a rise in food prices and other essential commodities, numerous individuals had to cut their consumption during the tough economic times (Brodeur et al., 2020). In fact, with some people laid off or even their salaries reduced, and with commodities prices being high due to the COVID-19 pandemic, a reduction in consumption was prompted (Brodeur et al., 2020). A decrease in consumption is thus the other effect that the COVID-19 pandemic has had in the U.S, especially now that commodity prices were high and the consumable income of most Americans was fixed or even reduced when the pandemic hit (Brodeur et al., 2020).
As far as the future effects of the COVID-19 pandemic are concerned, a recession will indeed begin if this continues. While the latter pandemic is currently associated with an economic slowdown, this is evident from the current decline in economic activities. According to the World Bank (2020), many businesses were closed down while others scaled down their operations due to the pandemic, leading to a recession if things remained unchanged. The World Bank predicts that the coronavirus pandemic and shutdown measures could potentially plunge the global economy into a fatal contraction, leading to a recession in the future (World Bank, 2020). The latter recession could be the deepest recession since the Second World War, making this one of the major future effects of the COVID-19 pandemic. Forecasts by the world bank showed that the U.S economy was expected to decline by 6.1% in 2020 and this trend was expected to continue in the future (World Bank, 2020).
Another future effect of the COVID-19 pandemic is an increase in poverty. According to Brodeur et al. (2020), the last few months, since the pandemic hit, have been characterized by a reduction in the real income of individuals, unemployment and a decrease in consumption and this could result in poverty in the future. While the COVID-19 pandemic has rendered several persons jobless and unable to afford necessities like food and housing, if this situation