Several analyses, including the scenario modelling done at the Bank of Finland, suggest that forceful but relatively short-lived restrictions to limit the spread of the pandemic will result in significantly lower output losses and economic damage than a more gradual approach with milder but longer-lasting restrictions. Nevertheless, the timing of lifting the restrictions will require a difficult balancing act, done preferably in international coordination.
In any scenario, policymakers must do their utmost to build a bridge over the troubled times, in order to prevent a sharp rise in bankruptcies and job losses. Mostly, the policy response has been swift.