How to configure VSCode to run Yarn 2 (with PnP) powered TypeScript

I had this problem last night while migrating to Yarn v2 and using PnP.

1. Make sure that after running yarn dlx @yarnpkg/sdks vscode the following folder structure was created inside your .yarn directory: .yarn/sdks/typescript/lib.
2. Change your VSCode workspace configuration to add the following:
   "typescript.tsdk": ".yarn/sdks/typescript/lib"

I also had another problem with step 1 while using Yarn workspaces in a monorepo, what I had to do was to install typescript, prettier and eslint as devDependencies to the root package (where it usually doesn’t have any dependencies). And on step 2 I changed the path to frontend/.yarn/sdks/typescript/lib