Nowadays, the spreading of coronavirus affected many countries, they are facing a lot of crisis which is a health crisis, financial crisis, and the shrink in commodity prices. The great lockdown in 2020 makes the economic growth in a recession, there is an estimation about global GDP will fall by about 3%, world trade contract, and unemployment rate increase. This is the worst economy that we met since the great depression. Previously, the first big recession economy is in the year 2009, the global financial crisis has enabled the global GDP to drop about 0.1% (Gopinath, 2020). Gross Domestic Product (GDP) is used to measure the total income and total expenditure in the economy. 

There are two main aspects of economic growth which are aggregate demand (AD) and aggregate supply (AS) (Pettinger, 2018). Economic growth is increasing in national income means there will be higher real GDP (Pettinger, 2018). In my recommendation, the economists need to work on some activities to increase the economic growth to solve the financial problems that occurred by the spreading of coronavirus. The first recommendation is arising the AD to increase the economic growth, AD is the meaning of total demand that is including the consumption, government spending, investment, and the net export (exports-imports). There have many ways to increase the AD, such as increase the real wages, if the inflation is under the nominal wages, the consumer spending or we called consumption will increase. The aggregate demand higher, economic growth increases, GDP will be increased.

Additionally, if AS rose can increase the economic growth, then the GDP will increase. AS is the meaning of total supply that includes productive capacity, the efficiency of the economy, and labor productivity. In the evolution of coronavirus, I recommend the rules of working can be more flexible, such as working from home or self-employment by using the internet. Also, can change the retirement age, if the retirement age has raised the supply of labor will increase. Productive capacity larger, aggregate supply higher, economy growth increase, GDP will be increased.        

Furthermore, the action of the government also will affect the economy. For example, there has started to transfer cash to those households and this action will make the aggregate demand increase and GDP increase because the consumption will be increased. The next action is SBP has announced that they will provide funds for those private businesses to help them maintain their operation and to prevent job cuts, prevent the unemployment increase continuously. For this action, the production capacity and labor productivity increase, the aggregate supply will also increase, the GDP will increase as follows.

Gopinath (2020) has mentioned there are positive real GDP at 2.9% in 2019, the economic growth is still healthy, but when the coronavirus has come at the end of the year 2019, the countries have managed to lock down their own country successively to avoid the coronavirus spread around the world. But the action of lockdown severely affect the economy into recession, the real GDP has about a deficit of 3% in 2020. After everyone’s effort and the policy that has set to help and the global economy, the GDP  in 2021 has to get back to normal, about 5.8% in positive sign. 

According to the data that has mentioned, the CPI inflation is 7.35% in December 2019, and there has 7.59% percent in January 2020. Previously, there have a few economists, about 20 people have predicted that there will be 7.4% in January 2020, but the record in January 2020 has exceeded the estimation by the economists. (Nataha, 2020).

In my opinion, the only can do in this evolution of coronavirus is to control other parts to reduce inflation. For example, control the wages. Nominal wages are stick in the short run, so the firms can adjust steadily by setting the nominal wages based on the price level that they expected. Decrease the wages, the spending from the consumers will be less, AD will reduce to control the inflation. The other way is managing the supply-side policy. This policy can make the economy become more competitive, then will cause them to moderate the inflationary pressures. The labor markets more flexible, the inflationary pressure also will be reduced (Pettinger, 2019). 

 I recommend increasing the real GDP that includes consumption, government spending, investment, and net exports. For example, European Central Bank is predicting to expand its bond purchase program that supports governments and borrowing markets. There will be increase spending on investment goods, then the quantity demanded will be increased, aggregate demand also rose, GDP increase, the unemployment rate will be reduced. This is called the interest-rate effect.

Additionally, the helping of the government also can reduce the unemployment rate. For example, the government has provided cash to pay most of their salaries, this situation is to support them sustain their operation of the business and not to do the action of laid-off. The unemployment rate decrease and production will increase, causes AS increase leads to Y increase, then GDP increase.

 According to the data that has given, mentioning that the unemployment rate finally returned back and drop sluggishly to 7.3% after January 2021 after a few actions to prevent the increase of the unemployment rate (“Unemployment rate in European”, n.d.). 

 I recommend to change and make the exports cheaper and the imports more expensive, leads the consumption to domestic demand will increase, the demand in exports rose, and imports decrease, the net exports will be stable and profitable, Y increase, GDP will increase sluggishly (Pettinger, 2018).

Furthermore, the government in the US supposed to plan for the exchange rate effect, the price level declines, decrease in the interest rate, also depreciated the US dollars to stimulate the net exports in the US, the quantity demanded of goods and service will be increased. Net exports increase, Y will also increase, GDP will increase as follows, the economic growth will be back to stable.  

After a few of planning, the export growth is increasing sluggishly, although there is still in deficit. In May 2020, the export value is $90.7b, but the export growth still in deficit 36% compared to December 2020, the export value is $133b, and the economic growth in deficit 2.07, this is showing that the export growth has to increase sluggishly (“Latest Trends in US”).
 

Furthermore, I recommend to execute the expansionary fiscal policy. Coincidentally, the government in Malaysia has planned to execute the expansionary fiscal policy. They are announced that they will provide RM20 billion and provide tax breaks for assisting those companies that have affected the pandemic. This policy has increased the AD through government spending and provide tax breaks. The effect of this policy is the spending of investment will increase after the tax break is provided. According to Rahim (2021), mentioned that the income tax will decrease by 1%. The spending of consumers also will increase by the decreasing of personal income tax., the government spending will increase through the government spending to increase the expenditures on final goods and services (“Fiscal policy”, n.d.).

The expansionary fiscal policy has increased investment, consumption, and government spending, which means that the AD will increase as GDP increase. 

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