Covid-19 Pandemic and the Global Financial Crisis of 2008

What does the Covid-19
pandemic teach us
about the global
financial crisis of 2008?

EXECUTIVE SUMMARY
Present report is mainly based upon the global financial crisis that affected the whole
world during the year 2008. the major impact of it was faced by housing industry and the prices
of houses and economy growth were two of the main factors which were impacted due to them.
This report focuses upon the externalities that are affecting these factors and resulting in changes
in demand and supply curve of the standard debt mortgage.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1 a. Diagram to show the demand and supply curve for standard debt mortgage and the way in
which externalities affect the diagram.........................................................................................1
1 b. Discussion of the applicability of Coase theorem in mitigating the negative externalities
that are associated with standard debt mortgage contract............................................................2
2. The way in which shared responsibility mortgages mitigate the negative externality
associated with standard debt mortgages.....................................................................................2
3. The effect of securitization in the diagram of supply and demand..........................................2
4. Explanation of the factors that caused the crisis in Amir Sufi and Atif Mian's view and the
way in which shared responsibility mortgages would prevent such crisis in future....................3
5. Impact of the changes in an aggregate demand and supply diagram.......................................3
6. Explanation of that if shared responsibility mortgages are widely adopted and they are
securitized to create sate debt would it prevent a future financial crisis.....................................4
7. Did financial innovations aimed at creating safe debt cause the crisis or was it primarily
caused by the collapse of the housing bubble?............................................................................4
CONCLUSION and RECOMMENDATION..................................................................................6
REFERENCES................................................................................................................................7