A Comparative Analysis of COVID-19 and the 2008 Financial Crisis: Evidence from the Canadian Economy

Abstract

This paper examines the dynamic effects of major economic shocks on the Canadian economy by comparing the Global Financial Crisis (GFC) and the COVID-19 pandemic. Using Dynamic Time Warping (DTW) and 24 months of data for each crisis, the study analyzes similarities and divergences across key indicators, including GDP, unemployment, trade flows, and exchange rates. The results reveal that although both crises triggered broadly comparable adjustment patterns, their trajectories diverged noticeably. The GFC was marked by a prolonged financial contraction followed by a gradual recovery, while COVID-19 caused an abrupt but shorter-lived disruption, shaped primarily by public health restrictions and supply chain bottlenecks. These findings suggest that despite differences in structural origins, Canada’s economic adjustment dynamics exhibit a degree of consistency, which highlights the resilience and adaptability of its macroeconomic policy toolkit when deployed swiftly and tailored to the nature of the shock.