Strictly speaking, the recession we are entering is a choice, taken on the advice of public health experts. To limit the contagion, we must pause normal life as we know it, which means pausing the economy. When we know more about the disease we will be able to judge whether this was the right call or a miscalculation that inflicted needless economic pain. For the time being, the more pressing question is how to do it without causing an economic meltdown.

Ed Conway, economics editor of Sky News  www.thetimes.co.uk

Some machines you can turn off with the flick of a switch. Others are nearly impossible to shut off. Nuclear reactors fall into the latter category. Decommissioning them takes years. Turning them off temporarily is a risky exercise; indeed, the most famous nuclear accidents — Chernobyl, Fukushima, Three Mile Island — all involved attempts to pause their reactors.

A sophisticated economy is not designed to be shut down either. While we know what should happen when you switch off a nuclear reactor, we have no idea what happens when you do the same to an economy, because until now no one has tried. But one consequence of Covid-19 is that across the world we are about to find out.

Strictly speaking, the recession we are entering is a choice, taken on the advice of public health experts. To limit the contagion, we must pause normal life as we know it, which means pausing the economy. When we know more about the disease we will be able to judge whether this was the right call or a miscalculation that inflicted needless economic pain. For the time being, the more pressing question is how to do it without causing an economic meltdown.

The good news is that since this is no normal recession — a deliberate one rather than one caused by economic malfunction — life should get back to normal once the machine is up and running again. The bad news is that we are flying blind.

There are a few important principles. We know that when people lose their jobs in recessions they often never work again. We know that when the financial system clogs up and businesses can’t borrow, some promising productive companies go belly up. If you want to put your economy into hibernation you need to avoid both of these “scarring” effects.

These principles are what lie behind the extraordinary measures introduced by the chancellor over the past fortnight. Businesses are to get cheap loans while employees and, as of yesterday, many self-employed workers, will be paid by the state to be “furloughed”: stay at home on a slightly reduced salary. While that unfamiliar word comes from America, in reality the job retention scheme has a decidedly continental flavour. Indeed, it is based on a German system called kurzarbeit.

Kurzarbeit, where the Federal Labour Office pays temporarily laid-off workers a chunk of their salaries, has been around for decades but came to prominence during the 2008 financial crisis when it helped to cut German unemployment rates, even as they were soaring elsewhere. The Treasury was considering imposing kurzarbeit as an emergency measure here in the event of a no-deal Brexit last year. In the end, they adapted those Brexit blueprints to create the Covid-19 job retention scheme over a few all-nighters last week.

The challenge is that nothing like this has ever been imposed in Britain — and for good reason. Labour markets in many continental economies, including France, Germany and much of Scandinavia, are comparatively static. Workers are more likely to be employed and to stay in their jobs longer, so there is logic to a scheme like kurzarbeit, since you can generally assume that if someone does a given job one year they are likely to be doing it the next.

But Britain’s labour market is much more fluid. People move between jobs more frequently, and there is more hiring and firing. This fluidity and churn is, economists believe, one of the UK’s strong suits. Yet it has also tended to mean that our unemployment level is higher than that of comparable EU nations during a recession. To see what would happen here without a kurzarbeit, you need only look at the vertiginous increase in universal credit applications before the job retention scheme was unveiled. Or indeed the terrifying jump in US jobless claims yesterday: not just the worst in history, the worst in history by a factor of five.

Statistics like that explain why the Treasury is ploughing on with such a radical programme. But how effective will Britain’s version of kurzarbeit be? Can a continental model, in which millions of workers are effectively paid by the state to stay at home, succeed in our country? Nobody, including the Treasury, knows.

Britain’s financial system is also being asked to stifle its normal behaviour thanks to the other leg of Rishi Sunak’s rescue package. For better or worse, Britain’s banks are less inclined to lend to small and medium sized businessses than, for instance, in Germany, where local savings banks, Sparkassen, offer generous loans to such firms. But the Treasury is now encouraging banks to lend to businesses despite the economic uncertainty. Can banks kick the habit of a lifetime and suspend the stringent checks they normally carry out before lending? The early signs are not encouraging.

Britain’s open, dynamic economy serves the country well in normal times. But these are not normal times. And putting this economy into hibernation will mean confronting all sorts of habits and attitudes many of our companies and businesses took for granted. Not firing staff to protect the balance sheet. Not withholding credit from struggling companies.

If these unfamiliar, continental measures do not succeed, Britain faces a deeper recession than many other nations. If they do, we may spend the following decades working out whether we can ever uproot them.