Economic uncertainty can have uncontrollable impacts. Learning from past crisis, Godinic et al. (2020) suggests that, to overcome uncertainty and stimulate growth, it is critical to protect citizen’s mental health.
The ongoing pandemic crisis is creating a great deal of uncertainty, which makes it feel like we do not even know how tomorrow will be. Nevertheless, previously learned lessons can be extremely useful, especially in regard to how we understand and mitigate potential risk.
Looking back at the 2008 global financial crisis, it is known that economic downturns can cause both cognitive and affective disturbances, which result from factors that include unemployment, downsizing of medical and social services, and general cuts in public spending. As pointed out by Godinic et al. (2020), combined with uncertainty, these factors can cause serious mental damages and, in the limit, result in depressive-anxiety disorders. In fact, as many of the measures implemented to contain the spread of COVID-19 focused on the limitation of social interaction, one of the main pillars of psychological well-being, the mental health of workers, which is essential to their productivity, becomes profoundly affected.
Following the Conservation of Resources Theory, health is considered a resource for overall well-being, whereby a healthy worker invests his cognitive capital and energy to increase organizational performance and productivity, which is essential to economic growth. So, according to the abovementioned authors, in order to use sustainability and efficiency as forces to overcome uncertainty and stimulate growth, it is thus critical to protect citizen’s mental health and devise incentives and social-welfare policies providing disabled individuals with necessary treatment and support during the crisis.
A more in-depth analysis of the psychological dynamics behind crisis and hazards would be helpful to devise schemes, welfare policies and healthcare initiatives to assist individuals in coping with catastrophic events.
Sources:
- Godinic, D., Obrenovic, B., & Khudaykulov, A. (2020). Effects of Economic Uncertainty on Mental Health in the COVID-19 Pandemic Context: Social Identity Disturbance, Job Uncertainty and Psychological Well-Being Model. International Journal of Innovation and Economic Development, 6(1), 61–74. https://doi.org/10.18775/ijied.1849-7551-7020.2015.61.2005
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Nova School of Business and Economics
