Doing more of what it takes

Next steps in the economic response to coronavirus

The Government has responded to coronavirus by shutting down large parts of the UK economy, and socialising the costs of doing so through a package of fiscal support to firms and individuals unprecedented in size and scope. Given uncertainty about how long public health restrictions will need to be in place, economic policy makers need to be prepared to manage what could be a protracted period of disruption to lives, livelihoods, and finances.

To support policy makers as they manage the economic fallout from this crisis, this paper examines the economic and fiscal implications of three different scenarios for the length of time for which social distancing measures need to be in place: three, six, and 12 months. It also discusses how governments can mitigate and manage possible tensions between their health, economic, and fiscal policy objectives.