Paradigm Shift in Finance: Insights from COVID 19

Purpose: This paper analyzes the literature and findings on the COVID-19 impact on the economy and provides insights and policy formulations for future pandemic-like crises. Methodology: Our paper follows secondary research analyzing existing literature on COVID-19 and its impact on the global economy. Our paper adopts a methodical literature survey approach to analyze peer-reviewed finance research articles. This approach has helped to evaluate the policy responses to the pandemic by analyzing studies on fiscal stimulus, monetary interventions, and public health measures. Further, it helps identify common trends, patterns, and gaps in knowledge. Findings: The COVID-19 pandemic has driven a paradigm shift in finance, reshaping how financial institutions operate, how consumers interact with financial services, and how markets function. These changes will likely have lasting effects, driving continued innovation and transformation in the financial sector. A forward-looking fiscal and monetary policy is vital for long-term economic care. The policies include investing in healthcare infrastructure, the digital economy, and education to prepare for future crises. Unique Contribution to Theory, Practice, and Policy: The COVID-19 pandemic undeniably created upheavals in the financial world. It forced a reevaluation of many long-held assumptions and accelerated trends already underway. Our paper demonstrates that future pandemic policies need to be more flexible and adaptable based on the economic structure and intensity of the crisis, along with international cooperation. The COVID-19 highlighted the economic vulnerabilities, transformed consumer behavior, and altered market structures. The paper’s insights provide a mechanism and illustration of how to mitigate and minimize such a crisis. Traditional economic and monetary policies are ill-suited. Countries should be ready for responsive policies and adjustments to manage pandemic-like crises; hence, this paper provides the groundwork for more adaptable policies.