Ali Arshad Publishes on New Mexico Economy and COVID-19

December 10, 2020

photo of Ali Arshad

Ali Arshad

Las Vegas, N.M. – The 2020 pandemic poses a grave danger to the New Mexico economy and increases the potential unemployment rate throughout the state, according to a New Mexico Highlands University business professor’s study.

Economic professor Ali Arshad’s research will be published in the International Journal of Business and Economic Perspectives later this month.

“The primary purpose of my research was to assess the economic impact of a further shutdown of the New Mexico economy due to COVID-19,” Arshad said. “The contractions in the economy have the potential of increasing the unemployment rate throughout New Mexico.”

Arshad said he looked at three different scenarios: a one-month shutdown of nonessential businesses, a three-month shutdown, and a six-month shutdown.

“A one-month shutdown would result in a projected 38,546 lost jobs, an estimated increase in unemployment of about 2.1%. A three-month shut down would cause a projected loss of 152,032 jobs that would increase unemployment by an estimated 8.3 %. A six-month shutdown could be catastrophic: a staggering 333,663 jobs lost, and a more than 19% increase in the unemployment rate,” Arshad said.

Arshad said the results would be different if the federal government provides direct financial help to small businesses and the State of New Mexico.

The methodology that Arshad used for his research is called the input-output method, showing each industry sector’s interconnectedness within an economy.

“I used IMPLAN, which stands for impact planning. It’s a software program that builds the mathematical model showing the interindustry relationships within a region. I used IMPLAN’s New Mexico data, which contains 546 sectors. The sectors include all the industries in New Mexico from milk production to passenger transit. The IMPLAN data also includes employment, employee compensation, industry expenditures, commodity demands, and federal, state and local taxes,” Arshad said.

Arshad said the pandemic is on the rise and not all people are following the guidelines set by health care professionals.

“Before we can fully open the economy, we need to ensure safety in the working environment,” Arshad said.

Arshad is an economic impact analysis expert who examines new investments and disinvestments in economies.

“My hope is that my study will help policy makers prepare and cushion the New Mexico economy from the adverse impact of COVID-19,” Arshad said.

Arshad has taught at Highlands University since 2009 at the university’s Rio Rancho Center. He earned his Ph.D. in economics from the University of Connecticut and a master’s degree in economics from Atlanta University.

Arshad taught previously at the College of Santa Fe, where he chaired the Business Administration Department for 11 years. Before that, he taught on the business faculty at Marycrest International and chaired the university’s Business Administration Department. He also was on the business faculty at Eastern Illinois University.

At Highlands, Arshad teaches classes such as Managerial Economics, International Financial Management, Corporate Finance, Intermediate Microeconomics, and Microeconomic Principles.

“Economics teaches students how to use the scientific method to study issues that affect all of us daily. It helps us understand the transactional world – the marketplace where we buy and sell. We live in a global community, and what happens in one part of the world may have a ripple effect on many other parts of the world,” Arshad said.