The shadow of the Omicron variant hangs over the global economy. Even though we remain largely ignorant of its transmissibility, virulence and ability to evade the protection of vaccination or prior infection, there is no better time to take stock of the economic lessons from the past two years in order to help set policy now.

Most important is that when a serious virus is circulating, you cannot separate economics from epidemiology. There is clearly a trade off between restrictions on normal daily life and short-term economic activity, but the underlying cause of both health and economic troubles is the severity of the epidemic. Controlling the virus is paramount.

Early and strict lockdowns were most successful in 2020 and operated well in much of Asia and the Pacific. But this year, effective vaccines and treatments have allowed life to return closer to normal in Europe and the US, so long as countries could encourage and coerce sufficient numbers of people to be inoculated. The promise of effective vaccines also lowers the cost of temporary economic restrictions at the start of a wave because an end to disruption is credibly in sight. They remove the need for the draconian restrictions inherent in a zero-Covid approach.