A Comparison of Economic Impact in US: COVID-19 and Ukraine Conflict

Abstract

This paper focuses on the comparison of the different economic impacts of the COVID-19 and Ukraine wars. The COVID-19 pandemic and the Russian-Ukraine war shaken the global economy and resulted in a record-breaking inflation rate in the United States that continued to increase until now. After a series of Stimulus bills and expansionary monetary policies, such as the CARES act and lowering interest rates, the United States GDP was able to recover from the direct effects of the pandemic. However, the labour force participation rate never returned to its previous level. After the Russian-Ukraine war broke out, the United States and its allies imposed a wide range of economic sanctions against Russia. The crude oil prices also surged in the first few days, making it a key contributor to the inflation. However, with the increase in interest rates, the US federal reserve was able to control the rise in inflation. This is corresponded by a surge in the S&P 500 stock index. Overall, the United States is far more affected by the COVID-19 pandemic than the Russian-Ukraine war by a wide range of comparisons.