In December 2019, there is a new disease identified in Wuhan, China. This disease’s name is Covid-19 or as we know coronavirus. WHO(World Health Organization) declared a pandemic on 11 March 2020¹.Doctors and researchers said that this virus spread during close contact, via small droplets produced by coughing and sneezing ². There is no known vaccine or cure right now for this illness. Primary treatment is symptomatic and supportive therapy. So authorities recommend preventive measures. This measures includes hand washing, social distancing and wearing face masks. Naturally people started buying and stocking because of this pandemic so this situation caused a global economic disruption. Many of the health and food products prices has increased. As expected, masks are one of the most affected product in worldwide.
Because of economic disruption, mask prices increased too much like many other product.
This caused masks inaccessible for the people. So some governments tried to intervene and regulate these prices. We can give an example for Turkish government intervention. First Turkish government declared that masks cannot be purchased with money but only be purchased via a code that government sent to cellphones of the people ³. But that does not solved the problem and worked well. Sometime later Turkish government decided to bring the old system back that masks can be purchased with money and somehow this time it’s worked. Why it is worked?
Basically when the pandemic started, supply of mask did not compensate the demand of mask because demand of mask suddenly increased too much. So this situation created a shortage of masks. And mask prices increased and remained too high for a period of time. No country or government was ready for this situation. Even if financial system based on gold standard like back in 19th and 20th centuries, it would not be able to regulate these mask prices. Gold standard system can able to provide stable exchange rate between countries currency and this can lead to an stable economy but can’t prevent this type of price fluctuations because natural disasters like this coronavirus pandemic, will meltdown economies. Only way to survive this natural disasters with less damage is increasing the productivity. When the productivity increases, supply will compensate demand and people can access the products because prices will decrease.
In the end, this type of natural disasters like wars, pandemics always have been tough for the economy. Governments always need to prepared for this situations for prevent economic meltdowns and deaths. But anyway, no government in the world cares for people as we know in past. So it is better to have preventive measures of our own.