COVID-19 has caused unprecedented economic shock, with greater magnitude and within a shorter time than any other crisis the world has seen. Within a month of the first case being recorded in the United States, unemployment and business bankruptcy rates were at an all-time high (Cassim, 2020). As a result, governments around the world reacted quickly, announcing and providing about $10 trillion USD in economic relief within the first two months of the pandemic (Cassim, 2020).


While governments around the world have used various tactics ranging from loans to equity investments, all shared the same goals that can be broken down into three primary objectives:

1. Financial Stability

This includes monetary-policy measures, which were the immediate response by many governments as they attempted to provide stimulus through liquidity injections and interest rate reductions (Cassim, 2020). Prudent financial measures were also enacted, as adequacy requirements were relaxed. The immediate focus on financial stability encompassed the entire economy broadly, and more specific aid packages followed.

2. Household Economic Welfare

Governments’ focus on individual household well-being came in the form of employment support measures. In Canada, the government launched the CERB and CESB initiatives to provide relief to individuals that had lost work or were unable to find any due to COVID-19. Other countries provided support to their most vulnerable citizens by increasing pensions and unemployment insurance or expanding social welfare programs to include food assistance (Cassim, 2020). Most governments focused solely on the short-term welfare of their citizens, with only 20% of governments taking measures for longer-term resilience, such as reskilling their workforce (Cassim, 2020).

3. Helping Businesses Survive

This aspect was especially crucial in countries whose economies consist primarily of small and medium-sized enterprises (SMEs), such as Germany (Cassim, 2020). Measures included loan guarantees, value transfers to companies through revenues, and easing of non-debt obligations. Rapid implementation of these measures was of great importance as businesses, especially SMEs, struggled with cash flow and felt the impact of government shut-downs almost immediately.

This visualization compares the economic stimulus responses during the 2008 financial crisis (darker blue bubbles) and the COVID-19 crisis (lighter blue bubbles). Evidently, far greater measures were taken during the COVID-19 pandemic.


While international governments were unanimous in their agreement on the aforementioned goals for supporting their countries, the methods and measures used varied greatly. Factors that influenced the type of action taken included the degree of the outbreak, the pre-existing social and business support, and the structure of the economy.

Coordinated Market Economies

These economies exist in countries that have strong balance sheets and comprehensive existing social support systems, with over 90% of their population covered by social protection floors (Cassim, 2020). Countries such as Germany, Austria, and the Scandinavian countries responded rapidly and on a large scale to protect their citizens and SMEs through loan guarantees, fiscal-policy adjustments, and leveraging high tax revenues to alleviate household expenses.  These countries are putting great emphasis on current relief. Going forward, a shift to more sustainable long-term policies and future-proofing of economies must be undertaken to ensure these countries maintain competitiveness on a global scale.

Liberal Market Economies

Canada, the U.S, and Australia are among the liberal market economies which face higher risks in the short-term, but will also benefit from greater flexibility in the future. These countries focus less on SMEs and are more skewed toward large corporations, have more flexible labour policies, and a less robust social support system compared to coordinated market economies. As a result, these economies have focused on immediate direct emergency relief transfers to individuals and companies, with more businesses expected to fail over the course of the pandemic. Despite higher rates of business bankruptcy, it is predicted that these economies will emerge even stronger, as they have the flexibility to pivot and focus on more innovative and sustainable technologies.

Emerging Market Economies

Countries with emerging market economies have been severely affected and have the fewest resources to provide support for their citizens and businesses. For example, Egypt, Kenya, and Nigeria will have to be innovative and highly targeted with their limited funding. These countries have lower debt resilience and more vulnerable currencies, causing them to rely heavily on donor support. Measures taken so far include reductions in lending rates and postponement of government fees. These economies will have to take a very targeted approach moving forward to ensure their most vulnerable citizens and businesses receive the support they need.

The above visualization compares the approaches taken by each of the three different economies.


Analyses by McKinsey & Company on the economic responses of the world’s 54 largest economies have shown that scaling up social infrastructure, strengthening digital delivery methods, and accelerating said delivery are the key components to the successful delivery of government stimulus measures.

McKinsey’s research also compared the approaches of the three different economies, which showed coordinated market economies successfully protected jobs. Unemployment rates in co-ordinated markets rose a minimal 0.7%, as compared to a liberal market economy, where unemployment rates tripled (Cassim, 2020). However, liberal market economies were provided more of a fresh start and were noted to be more capable to pivot as opposed to coordinated market economies which inadvertently protected unviable businesses.


The COVID-19 pandemic has highlighted that constant change may well become the “new normal”. Governments must be prepared for and aware of the areas of our economies and lives that are bound to be impacted the most, including a few which are listed below:


With a shift to a contactless economy in everything ranging from the food industry, education, and in the workplace, the popularity of artificial intelligence (AI) is on the rise. Automation and AI will cause a large workforce transition in the near future, as roughly one in 3 tasks within 60% of occupations have 30% of tasks that are viably automatable (Cassim, 2020).

The Workforce of the Future

The workforce must become more adaptable to the change and technologically savvy in order to become more productive in the future of automation. Governments will need to make provisions for workers, as between 75 to 375 million workers may potentially need to switch occupational groups by 2030 in order to stay relevant as a result of automation (Cassim, 2020).

Resilience of Supply Chains & Security of Essential Goods

Covid-19 has been especially ruthless in exposing weaknesses in global supply chains for all sorts of products. Personal protective equipment (PPE) for healthcare workers is one of  the most prominent essential products that fell prey to a weak supply chain and was not being received quickly enough. This rude awakening will lead to the inshoring of major manufacturers as well as an increase in production capabilities for essential goods such as food and medicine. Moving forward, the goal is to build resilience against future supply chain shocks and become more autonomous.


The Covid-19 pandemic has affected the world in a drastic way that triggered unprecedented government response. Governments have used various measures of fiscal stimulus and monetary policy to promote financial stability and support for their citizens and businesses. Around $10 trillion USD has already been spent globally in government aid packages. While world economies are beginning to recover, the long-term impact of government measures remains yet to be seen.


Cassim, Z., Handjiski, B., Schubert, J., & Zouaoui, Y. (2020). The $10 trillion rescue: How governments can deliver impact. Retrieved July 07, 2020, from