GDP after COVID-19
As COVID-19 rips through different states and cities in the United States of America, its impact is being felt by both those infected and individuals who are not infected. The lockdowns needed to control the spread of the virus are freezing the economies of several states with speed. Cases of unemployment are also rising showing a sign of economic recession. The United States congress uses GDP data to determine budgets and plan on tax policies. A hypothesis that the GDP before COVID-19 was higher than the GDP after COVID-19 is formulated to understand the pandemic’s impact on the economy. A t-test is used to statistically evaluate the hypothesis by comparing the means of the GDP of the months preceding the pandemic against the months after the virus started to spread ().
Both quantitative and qualitative data would be needed to prove the hypothesis. Therefore, it would entail both looking at values and at the same time observing the changes in economy qualitatively. A crucial hurdle in testing the hypothesis is the unavailability of economic data as lockdown measures have kept workers of various statistical offices at home. Physical visits to businesses and stores is a challenge hence questionnaires are not being produced and responded to. Better decisions on fiscal stimulus and monetary policies can only be arrived at with frequently updated data.
According to national statistics, 70% of America’s GDP is made up of consumption but the industry has slumped as businesses close. Households have also held off major purchases worrying about their finances. Investment constitutes about 20% of the GDP but several businesses have put off investments as they use a wait and see approach on the eventual cost of COVID-19. Closure of the businesses also means that there are more layoffs in the country. On the other hand, the manufacturing industry makes about 11% of the United States of America Gross Domestic Product. The industry has been disrupted since global supply chains have been affected by factory closures. The recreation and entertainment sector has also been adversely affected by lockdown measures. Entertainment sites as well as restaurants and hotels have closed down. The disruptions in the sector would mean that the GDP contribution would decline towards zero.
Statistically speaking, the mean monthly GDP contribution of various sectors of the economy can be compared before and after the spread of the pandemic. A significance difference in the mean values would imply that there is a negative significant impact of COVID-19. Credible data from accredited medical organizations and institutions such Johns Hopkins University of Medicine will enable a statistical research and analysis of COVID-19 data and its impact. Similarly, innovative and accurate data collected on the impact of the virus on the economy by the federal government. Subsequently, the data would be vital in comparing the GDP of the country before and after the pandemic.
Qualitatively, data can be collected through credible social media applications such as Twitter on the individual effect of the virus. Data mining procedures will be essential in testing the data. The likelihood of a more spread of coronavirus means that longer and intense lockdown measures should be enforced to control it. This would imply that economic recovery will not be possible. Therefore, with statistical input, comparisons of GDP means would be essential in making informed decisions whether to enforce lockdown measures, or lift the measures in some regions.