I wouldn't look at economic theory to predict what will happen as economists haven't studied economies subject to pandemics, but you can look at the reality on

I wouldn't look at economic theory to predict what will happen as economists haven't studied economies subject to pandemics, but you can look at the reality on the ground 1/ consumer confidence is extremely low as people are afraid of the virus and afraid of losing their jobs 2/ businesses have seen sudden and complete revenue destruction with revenue going down from 50% to 0% of pre-crisis; however their obligations (salaries, servicing debt, paying suppliers) obviously are still there. The natural instinct is to pause projects, new hiring, layoff people, stop buying things, postpone payments to suppliers and be more aggressive in collecting invoices. This becomes a self-reinforcing cycle purging non-essential businesses or non-competitive businesses at a very high rate. This will accelerate until normal people are no longer afraid to go out and then the supply chains will restart with the businesses managed to remain alive. The best policy response would be to freeze the capitalist system altogether and allow any liability due in the future to be postponed by 3 months when entities can prove significant revenue shortfalls and implement an aggressive government-backed temporary unemployment system for those businesses as well. To the extent that people haven't lost their job yet, it would fix the impulse of business owners to do this very aggressively in the necessity to balance inbound and outbound cash and post-crisis these businesses would have similar balance sheets as pre-crisis so life can resume quickly. For normal people nothing would change much to the current situation (stay at home, temporary unemployment, being afraid). The other good policy response I have seen is to force banks to give businesses a corona-credit and to guarantee those loans. It's less good because it does increase the debt-load of a company which alters their balance sheets and would have to be paid off post-crisis.