Inflation and Recession under Economic Crisis

Abstract

This paper examines the macroeconomic impact on economies of recent crisis events, such as the coronavirus pandemic and the Russia-Ukraine conflict. The COVID-19 pandemic and the Russia-Ukraine conflict have led to unprecedented disruptions in supply, demand, and productivity, with catastrophic impacts on health, society and the economy across the globe. This paper compares the changes in the relevant economic data of the United States, Europe and China through a simple comparison of graphic data (all from Trading Economics), and explores the differences and causes. It is clear that all three regions have been hit hard, and unemployment rates in the United States and the European Union have risen sharply during the pandemic, reaching a peak in recent 10 years. Their core consumer price indices (core CPI, excluding volatile items such as food and energy) rose sharply after the pandemic and the Russia-Ukraine conflict. China's core CPI showed a V-shaped trend, which briefly fell after the epidemic in 2020, but began to rise sharply in 2021, which is due to the low consumer confidence in China in 2020. Consumption went sluggish, and market prices fell, which is reflected in the core CPI as a downward trend. In 2021, consumption picked up, then prices rose, and the core CPI also rebounded. China's unemployment rate has also changed significantly, rising during both crises.