Here's how economists can help shape the future

Businesses shutting down, massive job losses, rising global debt. The world is witnessing an enormous economic crisis not seen since the Great Depression. But to what extent will COVID-19 reshape the global economy? And will economists be crucial in shaping that change?

Forecasts from the OECD for 2020 suggest a drop in global GDP of 6 per cent. Advanced economies will suffer even larger decreases.

According to Professor Mark Crosby, a macroeconomist with Monash Business School, there are two key areas which are still very uncertain post COVID-19.

First, the rules and regulations of finance. Before COVID-19, banks were already under a lot of pressure. With digital disruption such as cryptocurrencies and electronic wallets for example, the power of the banks has partly transferred to tech companies. The pandemic is only likely to speed up this transformation.

Understanding and shaping this future will be of the utmost importance, and economists will be at the forefront of new policy ideas in both government and the private sector.

Secondly is the rising inequality and governments’ role in addressing it.

“Governments really need to think about some of the policies proposed such as a universal basic income in order to cope with higher unemployment after COVID-19," says Professor Crosby.

"We need to protect and support people when they suffer a shock but also try to support the economy in the longer run by supporting entrepreneurship, innovation and small businesses."

But how much of this is the role of government and how much can be taken care of by businesses and markets?

Both governments and corporations are racking up huge amounts of debt which could be the most pressing problem once COVID-19 is over.

The debt question is very different across countries, says Professor Crosby.

"It’s not a huge problem in Australia as our debt level wasn’t very high to start with. In Europe, it’s a different story as many economies are heavily indebted. This is already causing a lot of tension in the European Union.

The US is another story, as they are able to print more and more money and people still want it. Traditionally high debt would imply high inflation but at the moment there doesn’t seem to be much inflation on the horizon,” he says.

Understanding and shaping this future will be of the utmost importance, and economists will be at the forefront of new policy ideas in both government and the private sector.

At the moment, most economists agree that the Australian Government is doing the right thing, closing down the economy to save lives. But the real test will come afterwards, during the period of recovery.

“That’s when the disagreements will start both about the economy but also about politics. Businesses will want more flexibility for employment for example, while unions will fight for more job security.

"Economists are able to see both sides of the arguments and seek to find a path that supports all stakeholders. This will be a most interesting time to be an economist,” says Professor Crosby.

Government debt, inflation, unemployment and digital disruption. We hear these concepts all the time, but do you know how they are all connected? Are you interested in shaping the economy of the future?

The Master of Applied Economics and Econometrics at Monash Business School will set you up to work in economic policy design and decision making in the public sector such as the productivity commission, state treasury or federal government.  Or it’s ideal for working in the private sector in banking, consulting firms or large corporations.

In addition, this master’s degree provides the opportunity to develop specialist expertise in a range of fields to suit your interests and future career goals – from economics and applied econometrics, to policy or development economics and more.

Monash Business School's Economics and Econometrics Departments also feature in some of the most prestigious and highly regarded international rankings of world universities.

Find out how you can join the brightest minds and get ready for a new future with a Master of Applied Economics and Econometrics at Monash Business School.