CORONA Virus, The Economic Status and the Role of Data Science in Future
Updated: Mar 25, 2020
Hello readers let me give you a glimpse about the Great Economic Depression, which damaged the world economy and lasted for about 10 years, started in the year 1929. This Great Depression was caused by various reasons, one of it was the stock market crash, and GDP fell by half limiting the economic moment. The Great Depression Affected all aspects of the society, by 1933 unemployment had risen from 3 per cent to 25 per cent. Gross Domestic Product (GDP) was cut in half, from $103 billion to just $55 billion. The Consumer Price Index fell down to 27 per cent in between 1929 to 1933 (Bureau of Labor Statistics, 2014). In the years 1929 to 1934 the US dollar plunged down by 66 per cent.
The Great Depression caused many farmers to lose their farms, years of over-cultivation and drought created the “Dust Bowl” in the Midwest, destroying agricultural production in previously fertile region. There were many farmers who migrated to cities in search of work. Before Great Depression of 1930, classical economists had suggested that Laissez fare policy and market forces will be taking care of the economic system and the development will be automatic. To summarise, at the time of Great Depression, the goods were available in the market but production was stagnant, and there were no sales as the economic status of the consumers was poor saying that there was no effective demand, which led to stagnation in the market.
But Classical Economics (CE) miserably failed to suggest the ways and means to come out from the Great Economic Depression of 1930’s which gave birth to Modern Economic thinking to suggest the measures to come out of economic depression. In this direction, J M Keynes’s with his work ‘General Theory of Employment Interest and Money’ has suggested that the States’ interference in Economic development is one of the important measures to overcome economic depression. If government spending increases, in addition to the existing private sector economy will be induced and effective demand will be created. The effective demand works as an oil to the engine and automatically economic problems will be taken care.
Even now Economic Depression is continuing, in addition to this, the World is facing Corona Virus Disease 2019 (COVID-19) which may lead to Great Economic Depression-II. When observed closely some patterns are similar like increase in gold price and decline in the price of Crude Oil, Real Estate is down, Fuel, Power and Car sales have been coming down. The production and the supply of goods are high, whereas the economic status of the consumers is poor due to economic depression making them not to afford what they want, even though the government has interfered the nation is suffering. In this juncture modern economic thinking has to be refined and fine-tuned further to create effective demand.
This is the situation where most of the medium and small producers/traders need to carefully play the game of business as the chances are high of losing the game. The best strategy is to Research and Develop their business in a slower speed for an effective and steady growth. Businessmen need to understand the market equilibrium to play their role the best. There will be many competitors in all the fields of business and few digital businesses are already taking over physical businesses in the 21st century. It means to say that, this economic break down digital markets have more potential to grow suppressing the physical firms.
At this circumstance, Data Science can play a very important role in understanding and predicting the Market Trends. Data Science methodologies can explore historical data, make comparisons to competition, analyze the market and ultimately make recommendations of ‘when and where’ the product or service will be sold at best (Data Science for Business, 2018). This can help the company to understand how their business can be fine-tuned.