Returning to substantial economic growth

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Reference no: EM13770092

Current, Greece has a debt of roughly 175% of GDP. The new government has announced it wishes to negotiate a write-off, something Eurozone leaders have so far refused. From prior knowledge and this post, I understand that governments may want to stimulate consumption when the economy is doing poorly, and have budget surpluses / pay off debt when the economy is doing well. Since the beginning of austerity, the Greek economy has shrunk by 25%, and unemployment is now 27%. I have mainly read economical opinions arguing that austerity is harmful and needs to stop, but I the sources I read are probably not representative.

Is there any historical precedent of a country that recovered from a 175% debt, without either having substantial debt write-off, or a currency devaluation? By recovering I mean: returning to substantial economic growth, increasing standards of living compared to crisis conditions and a public debt shrinking to become substantially less than 100%. If so, how did they do it?

Reference no: EM13770092

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