Question

In 2020, the world is economically held hostage to the COVID-19 pandemic. What role should capital...

In 2020, the world is economically held hostage to the COVID-19 pandemic. What role should capital controls play in recovering from the latest economic crisis? Why would or would not these controls benefit a country or the global economy? How?

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Answer #1

COVID -19 has caused unprecedented damage to the economic system, and growth has been paralyzed severely.

Capital control is the most critical strategy to stabilize the economy. Uncontrolled capital can cause several unstable movements in the economy. Controlled capital flow causes the overheating and crashing of economy.

Capital is likely to move away after the COVID-19, thus if government controls the capital, there will be stability in economy. The investors would not be able to move away their capital. Usually, the control of capital discourages the new capital inflow but it is required currently to control the capital esle crisis would take the larger dimension.

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