Covid-19 Instigates Economic Anxiety
The world is invaded not by war or aliens but by a global pandemic that affects almost the whole population worldwide. COVID-19 is the pandemic the no one in the world had predicted that would eventually come.
Mostly thinks that this is the only pandemic that the world is experiencing now, but there is more than this. This pandemic could be a cause of a newer one. For it doesn’t only affects people physically and emotionally but mainly it affects people way of living and even the economy.
Financial Anxiety a New Pandemic
With the global economy on the verge of melting down worries arises through the business sector in the world. Worries of their businesses financial stability and if it could survive in this economic movement that affects large and even small companies. In the middle of this pandemic, business analyst states that the economy is badly affected by this pandemic.
Economist Robert J. Shiller, stated that this pandemic has cause another pandemic to arise and according to him it is called “financial anxiety”. This another pandemic is the anxiety of people and investors to the economic consequences that the world market will face during this pandemic. Shiller added that this anxiety is caused by rapid dropping of the stock market and the hit in the economy it had cause.
For COVID-19 is draining the financial savings of everyone and in the long run it will definitely bring some companies into bankruptcy. The main source of this financial anxiety as to Shiller, is that people are anxious to what certain actions and decisions they should make in the middle of this pandemic and the consequences it can bring to them.
Mostly think that this financial anxiety is a so called direct by product of the crises caused by COVID-19. Others classify this anxiety as just a logical reaction to the pandemic. Contrary to this the pandemic of financial anxiety, the spreading of this is mostly cause by the panicked reaction of people towards price drops, business closure and changing narratives has its own life.
No one would be happy in hearing that this new pandemic had create another one. Gradually not all could feel this new pandemic as of now but in the long run it will surely affects everybody and caused a damages. Damages in terms of the economy and business such as closure of businesses, unemployment, and lost income that could fuel this anxiety.
This anxiety is not a good news for us, as of now most of our attention is in keeping our self-safe. Financial anxiety could cause people to be desperate in looking for work and some could turn into violating the precautions given by the government for disease control.
Pandemic’s effect on the stock market
With the current reported dropping movements of the stock market, many are in the middle of too much worry or anxiousness to what would be its effects on the economy worldwide. This is where financial anxiety starts this anxiousness affects on how people look into things. Too much anxiety could tend to a wrong decision, uncertainty and fear. People’s point of view towards the stock market today is considered a phenomenon that is known in psychology as “affect heuristic”.
Psychologist Paul Slovic, of the University of Oregon defines “after heuristic” as when people are expressively or emotionally upset caused by a tragic or disastrous incidents. Where people tend to react with fear and even anxiety on conditions where supposedly there is no reason to feel fear or become anxious.
Diversely people who has financial anxiety would look at this differently. For the effects of financial anxiety is different than the effects of a disease. Financial anxiety happens when a people see the lack of confidence and price drops in the market and others reaction to this price movement. People experiencing this tend to have a pessimistic view toward the stock market and is highly affected by other people reaction when the price declines.
Witnessing the continuous decrease in the stock market prices it caused regrets to those who had not sold their stocks, and anxiety or fear that they may not have a chance to sell it or selling it with a lower price.
Analyst states that the stock market movement will depend on people’s decisions and movements. For people has the decisions to make to what will happen in the market and in the business trade around the world.