Global economic crisis of 2020 and a new paradigm of countercyclical management

Anatolii Poruchnyk; Anatoliy Kolot; Pawel Mielcarek; Yaroslava Stoliarchuk; Denys Ilnytskyy

doi:http://dx.doi.org/10.21511/ppm.19(1).2021.34

Global economic crisis of 2020 and a new paradigm of countercyclical management

Received February 2, 2021;

Accepted March 15, 2021;

Published March 26, 2021
Author(s)

Link to ORCID Index: https://orcid.org/0000-0002-6740-796X

Anatolii Poruchnyk
,

Link to ORCID Index: https://orcid.org/0000-0002-4393-9806

Anatoliy Kolot
,

Link to ORCID Index: https://orcid.org/0000-0002-1997-4361

Pawel Mielcarek
,

Link to ORCID Index: https://orcid.org/0000-0001-9124-6310

Yaroslava Stoliarchuk
,

Link to ORCID Index: https://orcid.org/0000-0001-8528-7845

Denys Ilnytskyy
DOI
http://dx.doi.org/10.21511/ppm.19(1).2021.34
Article Info
Volume 19 2021, Issue #1, pp. 397-415
TO CITE АНОТАЦІЯ
Cited by
11 articles

1800 Views
651 Downloads

This work is licensed under a Creative Commons Attribution 4.0 International License

The new quality of globalization, which has emerged in the last decade and encompasses drastic changes in the economic, political and technological spheres, gives rise to a number of phenomena that violate the traditional logic of historical progress. One of them is the metamorphosis of the world economic cyclicity that emerged during the global 2020 economic crisis and led to a radical change in its nature, driving forces and regulatory mechanisms. The paper reveals the prerequisites for the crisis caused by traditional and emerging factors and proves its pandemic nature, which manifests itself, on one hand, in the synchronization of national business cycles, and on the other – in the integrative mutual influence of its political, institutional and environmental components. It has been proven that a particularly destructive role in the global regulatory mechanism was played by the “overlap” in space and time of the economic crisis and the health crisis provoked by the coronavirus pandemic. This requires an urgent systematic reform of global countercyclical management institutions based on a gestalt paradigm, which is qualitatively different in principles, goals and tools from the existing mechanisms for managing national economies and multinational enterprises. Scenario forecasts of the post-pandemic future of the world economy through overcoming the growing disintegration and deglobalization trends are outlined.

view full abstract

Keywords
cyclical nature, ecology, global economic crisis, globalization, healthcare system, institutionalism, pandemic, political elite
JEL Classification (Paper profile tab)
F44, F63, I15, O11
References
84
Tables
2
Figures
5

- Figure 1. Global GDP cyclical dynamics
- Figure 2. Cyclical dynamics of global GDP per capita
- Figure 3. Cyclical development of globalization of the world economy
- Figure 4. Pandemic lifecycle architecture
- Figure 5. Conceptual model of cyclical GDP dynamics

- Table 1. Global GDP growth dynamics: actual and post-pandemic scenarios, %
- Table 2. Characteristics of the stages of the pandemic life cycle

- Abel, E., & Bernanke, B. (2008). Makroekonomika [Macroeconomics] (768 p.). St. Petersburg: Piter. (In Russian).
- Aldasoro, I., Avdjiev, S., Borio, C., & Disyatat, P. (2020) Global and domestic financial cycles: variations on a theme (32 p.). BIS Working Papers:Monetary and Economic Department, 864.
- Anaya, P., Hachula, M., & Offermanns, C. J. (2017). Spillovers of U.S. unconventional monetary policy to emerging markets: The role of capital flows. Journal of International Money and Finance, 73(PB), 275-295.
- Anzoategui, D., Comin, D., Gertler, M., & Martinez, J. (2019). Endogenous technology adoption and R&D as sources of business cycle persistence. American Economic Journal: Macroeconomics, 11(3), 67-110.
- Arbatli-Saxegaard, E. C., & Muneer, M. A. (2020). The countercyclical capital buffer: A cross-country overview of policy frameworks (47 p.). Norges Bank: Staff Memo, 6.
- Baker, B. K. (2010). The impact of the international monetary fund’s macroeconomic policies on the AIDS pandemic. International Journal of Health Services, 40(2), 347-363.
- Beirne, J. (2020). Financial cycles in asset markets and regions. Economic Modelling, 92(C), 358-374.
- Bellù, L. G. (2011). Development and Development Paradigms A (Reasoned) Review of Prevailing Visions. FAO: EasyPol issue paper, Module 102.
- Berger, T., & Wortmann, M. (2020). Global vs. group-specific business cycles: the importance of defining the groups. Macroeconomic Dynamics, 1-23.
- Bjerkholt, O., & Frisch, R. (Ed.) (1997). Foundations of Modern Econometrics: The Selected Essays of Ragnar Frisch. The Scandinavian Journal of Economics, 99(1), 143-151.
- Bordo, M. D., & Helbling, T. (2003). Have national business cycles become more synchronized? (63 p.) (NBER Working Paper, 10130).
- Burns, A. F., & Mitchell, W. C. (1946). Measuring Business Cycles. NBER Studies in Business Cycles, 2(3).
- Cerra, V., & Saxena S. C. Booms, Crises, and Recoveries: A New Paradigm of the Business Cycle and Its Policy Implications. IMF Working Papers, WP/17/250, 30.
- Choudhry, T., Hassan, S., & Shabi, S. (2020). U.S. economic uncertainty, EU business cycles, and the global financial crisis. International Journal of Finance & Economics, 25(1), 28-42.
- Clark, J. M. (1934). Strategic Factors in Business Cycles. New York: National Bureau of Economic Research.
- Deloitte (2017). The Fourth Revolution is now: are you ready? Future of Operations (20 p.). Deloitte.
- Feldkircher, M., & Huber, F. (2016). The international transmission of US shocks – Evidence from Bayesian global vector autoregressions. European Economic Review, 81, 167-188.
- Ferasso, M., & Bergamaschi, E. (2020). Kondratieff’s Economic Waves and Future Scenarios Planning: an approach for organizations. Technology Innovation Management Review, 10(2), 51-61.
- Focacci A. (2020) Wavelets for Long Waves: Was Kondratieff’s Intuition Right? Journal of Economic Structures, Preprints.
- Fridman, M. (2012). Metodologiya normativnoy ekonomicheskoy nauki. Filosofiya ekonomiki. Antologiya [Methodology of normative economics. Philosophy of economics. Anthology] (pp. 177-216) (Original work published 1953). Moscow: Izd. Instituta Gaydara. (In Russian) .
- Goldschmidt, A., & Hilbert, J. (2009). Health Economy in Germany – Economical Field of the Future (Gesundheitswirtschaft in Deutschland – Die Zukunftsbranche) (22 p.). Germany: Wikom Publishing house, Wegscheid. ISBN 978-3-9812646-0-9.
- Gong, C., & Kim, S. (2018). Regional business cycle synchronization in emerging and developing countries: Regional or global integration? Trade or financial integration? Journal of International Money and Finance, 84, 42-57.
- Gopinath, G., Boz, E., Casas, C., Díez, F. J., Gourinchas, P.-O., & Plagborg-Møller, M. (2020). Dominant Currency Paradigm. American Economic Review, 110(3), 677-719.
- Grinin, L. E., & Korotaev, A. V. (2010). Glonalnyi krizis v retrospective. Kratkaya istoriya podyomov i krizisov: ot Likurga do Alana Grinspena [The global crisis in retrospect. A breaf history of booms and crises: From Lycurgus to Alan Greenspan] (336 p.). Moscow: LIBROKOM. (In Russian).
- Haberler, G. (2016). Protsvetaniye i depressiya [Prosperity and Depression] (475 p.) (Original work published 1937). (In Russian).
- Habib, M., & Venditti, F. (2019) The global capital flows cycle: structural drivers and transmission channels (54 p.). European Central Bank Working Paper Series, 2280.
- Halchynskyi, A. S. (2010). Ekonomichna metodolohiia. Lohika onovlennia [Economic methodology. Update logic] (pp. 127-128). Kyiv: ADEF Ukaina. (In Ukrainian).
- Hall, V. B., & McDermott J. C. (2020). The business cycle and monetary policy: what changed after the GFC? New Zealand Economic Papers.
- Harrod, R., & Hansen, E. (1997). Ekonomichni tsykly i natsionalnyi dokhid / Klasyky keinsianstva [Economic cycles and national income / Keynesian classics] (In two volumes). Ekonomika – Economics, Vol. 1, pp. 195-415; Vol. 2, p. 431. Moscow. (In Ukrainian).
- Holloway, R., Rasmussen, S., Zaza, S., Cox, N., & Jernigan D. (2014). Influenza Pandemic Framework Workgroup. Updated Preparedness and Response Framework for Influenza Pandemics. CDCP Morbidity and Mortality Weekly Report: Recommendations and Reports, 63(RR06), 1-18.
- IMF. (2020). World Economic Outlook. IMF.
- Inaba, K.-I. (2020). A global look into stock market comovements. Kiel Institute for the World Economy Review of World Economics, 156(3), 517-555.
- Jordà, O., Singh R., & Taylor, A. (2020). Longer-Run Economic Consequences of Pandemics (22 p.). (Federal Reserve Bank of San Francisco Working Paper, 09).
- Kaihatsu, S., Koga, M., Sakata, T., & Hara, N. (2018). Interaction between Business Cycles and Economic Growth (40 p.). Bank of Japan Working Paper Series, 18-E-12.
- Karadimitropoulou, A. (2018). Advanced economies and emerging markets: Dissecting the drivers of business cycle synchronization. Journal of Economic Dynamics and Control, 93, 115-130.
- Kiyotaki, N., & Moore, J. (1997). Credit Cycles. Journal of Political Economy, 105(2), 211-248.
- Knoop, T. A. (2009). Recessions and depressions: understanding business cycles: understanding business cycles. ABC-CLIO (2nd ed.).
- Kolodko, H. (2020). Pislia pandemii. Ekonomika i polityka u postpandemichnomy sviti [After the pandemic. Economics and politics in the post-pandemic world]. Ekonomika Ukrainy – Economy of Ukraine, 5, 3-24.
- Kondratiev, N. D. (2002). Mirovoye khoziaystvo i yego konyunktura vo vriemia i posle voyny [The world economy and its conjuncture during and after the war] (pp. 40-341) (Original work published 1922) (In Russian).
- Kose, M. A., Otrok, C., & Prasad, E. (2012) Global business cycles: convergence or decoupling?. International Economic Review, 53(2), 511-538.
- Kose, M., Sugawara, N., & Terrones, M. (2020). Global Recessions (71 p.). (WB Policy Research Working Paper, 9172).
- Kotz, D. (2009). The Financial and Economic Crisis of 2008: A Systemic Crisis of Neoliberal Capitalism. Review of Radical Political Economics, 41(3), 305-317.
- Krugman, P. (2020). The case for permanent stimulus. In R. Baldwin & Weder, di Mauro B. (Eds), Mitigating the COVID Economic Crisis: Act Fast and Do Whatever It Takes (227 p.). CEPR Press. London.
- Liao, Y., Loures, E. R., Deschamps, F., Brezinski, G., & Venâncio, A. (2017). The impact of the fourth industrial revolution: a cross-country/region comparison. Production, 28, 18. e20180061.
- Liu, D., Sun, W., & Zhang, X. (2020). Is the Chinese Economy Well Positioned to Fight the COVID-19 Pandemic? the Financial Cycle Perspective. Emerging Markets Finance and Trade, 56, 2259-2276.
- Lucas, R. E. (1977). Understanding Business Cycles / in Brunner, K. & Meltzer, A. (ed.) Carnegie-Rochester Series on Public Policy (36 p.). Amsterdam: North Holland.
- Lukianenko, D. H., & Poruchnyk, A. M. (Eds). (2010). Antytsyklichne rehuliuvannia rynkovoi ekonomiky: hlobalizatsiina perspektyva [Countercyclical regulation of a market economy: a globalization perspective] (334 p.). Kyiv: KNEU. (In Ukrainian).
- Mankiw, G. N. (2010). Macroeconomics (598 p.). Harvard University.
- Meadows, D. H., Randers, J., & Meadows, D. L. (2004). The Limits to Growth: The 30-year Update (3rd ed.) (338 p.). Chelsea Green Publishing.
- Mejía-Reyes, P., Rendón-Rojas, L., Vergara-González, R., & Aroca, P. (2018). International synchronization of the Mexican states business cycles: Explaining factors. North American Journal of Economics and Finance, 44, 278-288.
- Mesea, O. A. (2013) The Analysis on the Cyclical Behaviour of Fiscal Policy in the EU Member States. Procedia Economics and Finance, 6, 645-653.
- Minárik, P., Vokoun, M., & Stellner F. (2018). Innovative activity and business cycle: Austria in the 19th and 20th century. E&M Economics and Management, 21, 2.
- Minsky, H. P. (1992). The Financial Instability Hypothesis (10 p.) (Working Paper, 74). The Jerome Levy Economics Institute of Bard College.
- Miyamoto, W., & Nguyen, T. L. (2017). Understanding the cross-country effects of U.S. technology shocks. Journal of International Economics, 106, 143-164.
- Nefiodow, L., & Nefiodow, S. (2014) The Sixth Kondratieff. A New Long Wave in the Global Economy. Charleston, ISBN 978-1-4961-4038-8.
- Obstfeld, M. (2020). Globalization Cycles (CEPR Discussion Paper, DP14378).
- OECD (2010). Counter-cyclical economic policy, OECD Economics Department Policy Notes, 1.
- OECD. (2020). OECD Economic Outlook. Paris: OECD Publishing.
- Piccarozzi, M., Aquilani, B., & Gatti, C. (2018) Industry 4.0 in Management Studies: A Systematic Literature Review. Sustainability, 10(10), 3821.
- Posen, A. (2020). Containing the economic nationalist virus through global coordination. In, R. Baldwin & Weder di Mauro B. (Eds.), Mitigating the COVID Economic Crisis: Act Fast and Do Whatever It Takes (227 p.). London, UK: CEPR Press.
- Povoroznyk, M. Y. (2020). Medychni posluhy u systemi hlobalnykh ekonomichnykh transformatsii [Medical services in the system of global economic transformations] (Doctoral dissertation) (272 p.). Kyiv: KNEU named after V. Hetman. (In Ukrainian).
- PWC (2017). The World in 2050: The Long View How will the global economic order change by 2050? (PWC Summary report, 14).
- Raheem, I. (2020). Global Financial Cycles and Exchange Rate Forecast: A Factor Analysis. Borsa Istanbul Review.
- Rifkin, J. (2011). The third industrial revolution: how lateral power is transforming energy, the economy, and the world (330 p.). Palgrave Macmillan.
- Saks, D. D., & Larren, B. F. (1996). Makroekonomika. Globalnyi podkhod [Macroeconomics. Global approach] (848 p.). Moscow: Delo. (In Russian).
- Savina, G., Haelg, F., Potrafke, N., & Sturm, J.-E. (2019). The KOF Globalisation Index – Revisited. Review of International Organizations, 14(3), 543-574.
- Schumpeter, J. A. (2006). Business cycles: a theoretical, historical, and statistical analysis of the capitalist process. Mansfield Centre, Connecticut: Martino Pub. ISBN 9781578985562. (Original work published 1939).
- Schutz, E. A. (2020) Planetary Eco-Collapse and Capitalism: A Contemporary Marxist Perspective. Forum for Social Economics, 49(3), 257-280.
- Shvydanenko, O. (2005). A New Globalization Paradigm: World Unity or Alternatives for Development? The International Economic Policy, 2(3), 5-29.
- Sidenko, V. (2014). Novi hlobalni vyklyky ta yikh vplyv na formuvannia suspilnykh tsinnostei [New global challenges and their impact on the formation of social values]. Ukrainskyi sotsium – Ukrainian society, 1, 7-21. (In Ukrainian).
- Sørensen, P. B., & Whitta-Jacobsen, H. J. (2010). Introducing advanced macroeconomics: Growth and business cycles (848 p.). McGraw-Hill Education. ISBN 978-0077117863.
- Stock, J. H. (2019) The business cycle is alive and well. Business Economics, 54, 79-84.
- Sylvan, A. M. (n.d.). The Great Lockdown: What to expect when you are expecting an economic crisis. Revista Latinoamericana de Investigación Social, 3(3), 80-93.
- Terrones, M. M., Aruoba, S. B., Diebold, M. F. X., & Kose, M. A. (2011). Globalization, the Business Cycle, and Macroeconomic Monitoring (IMF WP/11/25, 53).
- Tugan-Baranovskii, M. I. (1997). Periodicheskiye promyshlennyye krizisy, Izbrannoye [Periodic industrial crises. Selection] (576 p.) (Original work published 1897). (In Russian).
- Tuncel, С. (2015). Neo-Schumpeterian Long Wave Theory and Nanotechnology: Assessing the Future of Manufacturing Industry. Journal of Economics and Development Studies, 3(1), 57-81.
- Weede, E. (2020). Geopolitics, Economic Freedom and Economic Performance. The Economists’ Voice, 17(1).
- WHO (2013). Pandemic influenza risk management: WHO interim guidance. Geneva, Switzerland.
- Wilenius, M. (2014). Leadership in the sixth wave – excursions into the new paradigm of the Kondratieff cycle 2010–2050. European Journal of Futures Research, 2, 36.
- World Bank (2020). The Global Economic Outlook During the COVID-19 Pandemic: A Changed World.
- World Bank Group. (n.d.). GDP growth & GDP per capita growth. World Bank and OECD National Accounts. DataBank (Accessed on December 1st, 2020).
- WTO. (2020). Trade shows signs of rebound from COVID-19, recovery still uncertain.
- Yépez, C. A. (2018). Cyclical wage movements in emerging markets compared to developed economies: a general equilibrium comment. Journal of International Trade and Economic Development, 27(6), 655-666.
- Yépez, C. A. (2019). Informality and international business cycles. Journal of International Financial Markets, Institutions and Money, 62, 252-263.

- Conceptualization
  Anatolii Poruchnyk, Anatoliy Kolot , Yaroslava Stoliarchuk
- Funding acquisition
  Anatolii Poruchnyk, Pawel Mielcarek
- Investigation
  Anatolii Poruchnyk, Yaroslava Stoliarchuk, Denys Ilnytskyy
- Methodology
  Anatolii Poruchnyk, Yaroslava Stoliarchuk, Denys Ilnytskyy
- Resources
  Anatolii Poruchnyk, Pawel Mielcarek
- Writing – original draft
  Anatolii Poruchnyk, Pawel Mielcarek, Yaroslava Stoliarchuk, Denys Ilnytskyy
- Writing – review & editing
  Anatolii Poruchnyk, Anatoliy Kolot
- Formal Analysis
  Anatoliy Kolot , Yaroslava Stoliarchuk, Denys Ilnytskyy
- Project administration
  Anatoliy Kolot
- Validation
  Anatoliy Kolot , Yaroslava Stoliarchuk, Denys Ilnytskyy
- Data curation
  Pawel Mielcarek, Denys Ilnytskyy
- Visualization
  Pawel Mielcarek, Denys Ilnytskyy

< Prev Next >

Download Preview

Problems and Perspectives in Management

Please specify your request here

Global economic crisis of 2020 and a new paradigm of countercyclical management

COOKIES
The cookie settings on this website are set to 'allow all cookies' to give you the best experience.

Please specify your request here

Global economic crisis of 2020 and a new paradigm of countercyclical management

The impact of COVID-19 on the transportation and logistics industry

IFRS convergence: opportunities and challenges in India

The impact of social distancing policy on small and medium-sized enterprises (SMEs) in Indonesia

COOKIES The cookie settings on this website are set to 'allow all cookies' to give you the best experience.

COOKIES
The cookie settings on this website are set to 'allow all cookies' to give you the best experience.