TRANSFORMATION OF ECONOMIC POLICY PRIORITIES UNDER COVID-19

Abstract

The aim of this paper is to analyze the main challenges of the new paradigm of economics in the context of Covid 19, the economic role of the state and the scale of state intervention in the economy. Economics teaches us that there is a time for budget expansion and a time for budget constraints. There are times when the government has to intervene in the value chain and there are times when it has to leave the markets alone. Sometimes the tax has to be high and sometimes low. Trade in some areas should be more independent and regulated elsewhere. Globalization is one of the primary variables impacting the state's economic condition in the modern world. The most important function of the state in the context of globalization is not only to protect the national economy from external influences (so-called "external shocks"), which is virtually impossible today, but also to effectively participate in international economic ties and increase the country's global competitiveness. In this aspect, the contemporary state plays a critical role. In turn, Georgia must construct a "Georgian model" of economy that will serve as the "core" of an economic model that would attract investment (in the real economy), generate employment, expand exports, and deliver true prosperity to all Georgians. Today is the day when, at the state's initiative, the country's economic priorities are defined and the country's distinctive economic potential is fulfilled. The modern economic crisis, which was triggered by the Covid-pandemic, has demonstrated that a route out of the current predicament is conceivable when the anti-crisis strategy is based on increased government participation in the economy. To accomplish so, the government and the public sector must play a larger role in crisis management. Despite these examples, the economic regulation of the state has always had strategic and tactical significance. For any country, there are and will always be state problems that are either not addressed through the supply-demand mechanism or are associated with negative side effects. Based on the existence of such cases, a set of free market economic measures is being developed through state programming of the economy and the use of regulatory tools. In view of the above, it is necessary to reconsider and reform the role and rights of the state in modern economic relations. The need to establish the state as a factor of progressive development in the economy should be emphasized during the reform. In addition, it should include legislative activities such as – compliance with labor safety conditions, regulation of the minimum wage, resolution of social conflicts, etc.