Loading On one level, the immediate global shock is much greater than the onset of world wars. On another, a "sudden stop" for three months is mostly an accounting mirage, so long as governments absorb the hit and economies are kept whole. Ben Bernanke, ex-head of the US Federal Reserve, likens it to a winter shutdown from a polar vortex. There is some permanent loss but pent-up demand and a V-shaped recovery later claws back most of the lost GDP. Catch-up growth gradually pulls down the public debt ratio. The hiatus does not fundamentally matter in macroeconomic terms unless we repeat the errors of austerity overkill and listen to those telling us that it is all too expensive. Thankfully these voices are being ignored in the US, UK, China, Japan and Europe (with big caveats). The Powell Fed has been magnificent. It has stepped into the breach as lender of last resort to the international dollar system, averting the risk of a "margin call" on $18 trillion (£14.7 trillion) of external dollar liabilities and halting a violent assault on emerging markets - for now at least. The safe-haven US dollar is still strong but it is not out of control.

The Fed has prevented a seizure of the US commercial paper and money markets. It has invented new powers to buttress the $3.4 trillion BBB-rated corporate debt sector. Junk bonds and leveraged loans are still vulnerable - but give Jay Powell a few more days. The actions have been breathtaking. Had monetary authorities acted with such speed in the subprime crisis, we would not have seen the partial collapse of the banking system The Bank of England and the UK Treasury have carried out a near perfect duet. The Sunak umbrella has not reached everybody but that is a matter of organisational mechanics. The core point is that a decision has been taken in principle - backed by a national consensus - to carry the burden on the shoulders of the state. It is a war-time response. Had the monetary authorities on both sides of the Atlantic acted with such speed in the subprime crisis, we would not have seen the partial collapse of the banking system. The Great Recession of 2008-2009 would have been a normal downturn.

It does not matter whether the Bank of England and global peers now break precedent and fund budget deficits directly. Indeed, it is necessary. Arnaud Mares, Citigroup's chief Europe economist, says they must accept "full fiscal absorption" and soak up treasury issuance of debt in these particular circumstances. If the central banks do not do so, "somebody else will have to fill the gap", which means gobbling up private capital needed to relaunch recovery. It means tightening monetary policy through a "reverse QE". Central banks must violate mandates in order to fulfil their mandates. It is the Lampedusa paradox: "Everything has to change so that everything stays the same." We have the global collective resources. It is doable. Whether or not we stumble into a great depression is a policy choice. Lord King, ex-governor of the Bank of England, says nobody should confuse current actions with "fiscal dominance" - the feared Peronist end-game when central banks are captured and forced to print. Joined-up fiscal and monetary stimulus in an acute emergency is nothing of the sort. The twin effects of economic contraction and an exploding deficit will lift Italy's debt ratio by 20 percentage points to near 155pc of GDP this year. Markets can see that this is unsustainable for a sub-sovereign like Italy with structural growth near zero. Unless EU leaders come up with some form of joint fiscal support very soon they invite grave consequences.

Loading There are other weak links in the global chain. Emerging markets have seen the most violent capital flight ever recorded over the last month. The International Monetary Fund says 81 countries have already put out feelers for help. Crisis veterans have called on the IMF to use its $1 trillion fire-fighting fund to guarantee all emerging market dollar debt due before the end of 2021. Ultimately, the shape of this ordeal will be determined by antibody tests for COVID-19. If they show widespread infection - and therefore a low implicit death rate - we can dial down lockdowns quickly and issue immunity certificates to the recovered. If not, it is going to be a long struggle. Global markets will break down if they start to fear that the tail risk of a long economic crisis is becoming all too real. This creates its own imperative. We must shut down every financial and economic feedback loop that is potentially dangerous - if only as an insurance policy. We have the global collective resources. It is doable. Whether or not we stumble into a great depression is a policy choice.

The Telegraph, London Sign up for our Coronavirus Update newsletter Get our Coronavirus Update newsletter for the day’s crucial developments at a glance, the numbers you need to know and what our readers are saying. Sign up to The Sydney Morning Herald’s newsletter here and The Age’s here.