The inevitable question then is, how do we escape this debt trap? In Chapter 12, we discuss a variety of mechanisms for escaping the debt trap, notably growth, unexpected inflation, default, jubilee debt cancellation, debt restructuring or a shift away from debt finance towards equity finance. We demonstrate that all these alternatives have problems, except for growth, which, alas, is likely to remain sluggish at best. Of course, what would be nice would be to raise productivity, but its growth has been disappointingly weak during the period since the GFC, for reasons that remain unclear.
