Impact of Covid-19 pandemic on macroeconomic aspects

Abstract

Economic development of a state can be well defined as quantitative alterations in macroeconomic variables, which upsurge the overall production or yield over a certain period, equated to the preceding period. Amongst many some principal macroeconomic aspects that donate towards the progression of economic growth comprise Interest Rate, Forex Rate/Exchange Rate, Consumer Price Index (CPI - Inflation), Current Account Deficit, and Stock Prices. Secondary data were used, USA, Pakistan and rest of the World, from January, 2016 to December, 2022 with monthly frequency was utilized for estimation of coefficients. The empirical results show that equality has a negative impact on economic growth of USA, Pakistan and rest of the World. Results indicate that the pandemic have a significant effect on the interest rate of World, USA and Pakistan which increases in the start and then gradually decline. The exchange rate of USA, Pakistan and rest of the World is devalued significantly along with the rate of unemployment which increase and both affect significantly and negatively impact on the economy. The consumer price Index was decrease because of high uncertainty which have a negative effect on the GDP of USA, Pakistan and rest of the World. This brings the current account deficit to decreased due to less import and it has a significant impact on economy.

Keywords

• Covid-19
• Macroeconomic variables
• Economic growth
• Hybrid DSGE-CGE global model