Gross Domestic Product (GDP) is the market value of all final goods produced in a country over a period, usually a year. GDP is the primary indicator of national production (Mateer & Coppock, 2021, p. 178). Last year, the U.S. gross domestic product fell 3.5%, the worst in more than 70 years. At the same time, in the first quarter, the country’s economy decreased by 5%, in the second – by a record 31.4%, and in the third – it also grew by 33.4%. This information is stated in the message of the Bureau of Economic Analysis of the U.S. Department of Commerce. The increase in GDP in the fourth quarter reflected both the continued economic recovery from a sharp downturn earlier in the year and the continued impact of the COVID-19 pandemic, including new restrictions and closings that have come into force in parts of the country. The total economic impact of the COVID-19 pandemic cannot be quantified in Q4 2020 GDP estimates, as effects are usually included in a baseline and cannot be identified separately (Bureau of Economic Analysis, 2021).
The pandemic and its associated crisis are far from over for many emerging economies, with vaccinations progressing slowly and financial pressures worsening. This year, GDP growth is expected in the U.S.; however, many developing countries will not return to pre-pandemic levels anytime soon. Overall, following a 3.6 percent contraction in the global economy in 2020, growth is expected to be 5.4 percent this year. Quarantine measures designed to stop the spread of coronavirus infection have led to significant losses in the labor market, especially in the service sector, where many women are employed. Also affected were those who work informally, that is, do not have labor contracts – in the event of loss of earnings, these people do not receive social assistance and often have no access to medical care.
The consequences of the economic shutdown on the labor market have been widely discussed. Less is known about which families were most affected and how they spent their extra time at home. If these extra hours were spent on home improvement projects, home teaching, and cooking, the loss of market output would be partially offset by increased home production activity (Leukhina & Yu, 2020). Accounting for the value of what is produced in households has always been conceptually necessary to obtain a complete picture of what society makes. With the growth of markets and trading states and the subsequent development of expanded trade in manufactured goods and then in services, the relative importance of home production in total final output has diminished. The inclusion of household activities in satellite accounts poses serious classification problems. One of the challenges is measuring the quantity produced, not consumed. Another problem is obtaining reliable estimates of nonmarket resources (National Research Council, 2005). The value of market resources is measured by their prices, which are assumed to reflect their marginal value to society. However, by their very nature, many factors of home production, especially the time that family members devote to such production, are not bought. The inherently nonmarket nature of home production means that the value of these inputs must somehow be credited rather than directly measured.
Faith is always essential, but it is imperative to rely on faith in challenging and difficult times. Faith reminds us that God is in control and that we need to depend on Him to see us even when there is a dark and confusing path ahead. “Have I not commanded you? Be strong and courageous. Do not be frightened, and do not be dismayed, for the Lord your God is with you wherever you go” (Joshua 1:9, ESV). He is balanced and ready, willing, and able to support us in everything.
Leukhina, O., & Yu, Z. (2020). Home Production Activity during the COVID-19 Shutdown. The Regional Economist, 28(3).
National Research Council. (2005). Beyond the market: Designing nonmarket accounts for the United States. National Academies Press
Bureau of Economic Analysis U.S. Department of commerce. https://www.bea.gov/news/2021/gross-domestic-product-4th-quarter-and-year-2020-advance-estimate
Mateer, D. & Coppock, L. (2021) Principles of Macroeconomics 3e (COVID-19 Update) with Biblical Commentary by Liberty University, New York, NY: W.W. Norton & Co.