How is the current economic crisis due to Covid-19 different from the financial crisis of 2008?

The world today is grappled in severe economic, infrastructural, geopolitical, and most importantly health crisis. This can clearly be inferred by the expansive SARS-COV-2 contagion and its numerous repercussions on the global society. Pandit Nehru's insightful words, "Crisis and deadlocks, when they occur have at least this advantage that they force us to think." aptly guides us to ponder upon the reason, cause, comparison to the past and lessons learned to dig up a solution irrespective of how outrageous the crisis be.

Economists and crisis management experts around the globe have made comparisons of the 2020 pandemic struck crisis with the 2008 financial crisis. This may seem understandable in theory but fails to satisfy the pragmatic equation and tends to ignore the major differences between the two. What the global economy witnessed in contours of 2007-2008 financial crisis was the result of the interdependence of economies in their wholesome brackets of economic globalization. The bankruptcy of Lehman Brothers investment bank, within a month, triggered a domino effect through the global financial system. This was accompanied by a collapse in the consumer business confidence and a flawed belief in market efficiency. The stock market (Dow Jones) fell approximately 777.68 %, the largest single-day loss in the history of American Markets and Sensex(Indian market) also fell to a low of 7697 by October 2008. India's rather insignificant connections to foreign banks insulated the crisis to some extent. The absence of full capital account convertibility further paved a way safer from the ongoing crisis.

Unlike the nominal effect on the Indian Market vis-a-vis 2008 financial situation, the ongoing crisis crippled the market to a substantial severity. The lockdown that was imaged as an indispensable urgency could have been proven extensively viable in getting at terms with the SARS/COV/2 contagion, nevertheless completely impeded the Indian markets with demands plummeting to a historic low, penury subsuming poverty and millions left homeless and stranded. From then on, the stock markets have regained their momentum and many of the stocks are at an all-time high, from which the pharma and agriculture stocks have been thriving the most. The economy still looks brink, as lockdown has caused several small and mid-size businesses to be completely shut down or go out of practice. Although The revival of the stock market vs the crashing economy is another topic to debate on,...

The failure of regulation on the bank's part was one of the major causes behind the 2008 crisis, while in the prevalent COVID 19 situation economic crisis was an outcome of lockdown and restrictive measures exercised to deter the spread of COVID-19. To tackle the current multi-pronged predicament the world should adhere to a much holistic, collaborative, and multi-disciplinary approach in order to triumph over this tussle. As Maxwell Maltz rightly quotes, "Close scrutiny will show that most 'crisis situation' are opportunities to either advance or stay where you are". So be it the financial adversity of 2008 or the ongoing catastrophe, optimism, and opportunistic stand may help to outcast the quandary of recession.