Identification of factors that contribute ex-ante to the resilience of an economy to health-induced economic crises
Report: Factors in the resilience of national economies
Mag. Dr. Wolfgang Schwarzbauer
Chief Financial Officer and Chief Human Resources Officer, Head of Regional Economic Policy and Foreign Trade Research
The spread of the SARS-CoV-2 coronavirus caught the world's governments unprepared and presented them with a Herculean task in containing it. The aim was to contain the further spread of the as yet unknown virus so as not to overburden the healthcare systems of the respective countries and to keep the mortality rate of the population as low as possible.
For this reason, many governments around the world resorted to the drastic measure of (partial) lockdowns of entire regions or countries in order to reduce physical contact among the population to the absolute minimum necessary. This resulted in the closure of entire sectors or industries, i.e. a restriction of the supply side of the economy. The problem with restricting the supply side of an economy is that the temporary closure of companies also reduces demand for labor and inputs from other companies or industries.
for labor and inputs from other companies or industries. This can exacerbate the crisis.
In the joint study by EcoAustria and IHS, factors in five subject areas are analyzed for their economic resilience effect. Chapter 2 analyzes the role of public finances for the resilience of an economy, particularly against the backdrop of a highly expansionary fiscal policy. In many respects, fiscal leeway is also linked to the design of labour market policy incentives, the resilience effects of which are examined in Chapter 3. Chapter 4 analyzes the role of companies' equity base. In the globalized
economy of the 21st century, the degree of diversification of procurement and sales markets ultimately plays a role. This is discussed in chapter 5. Finally, Chapter 6 describes the relevance of digital infrastructure for the resilience of national economies. The question of the efficient organization of resources in the healthcare sector, which is relevant in this economic crisis triggered by a pandemic, is analyzed in a separate report.
analyzed in a separate report.
