I don't see that as the only or even the most likely course of events. If one side sees it's going to lose conventionally, it has two options:
A) escalating to nuclear - which has a high likelihood of escalating so much that everyone loses hard. Which involves the active side losing 50% of its population and 90% of its economy/industry/tech base.
or B) saying "ok, you win" and backing down. If it does that, it will lose a few percent of its population and some more percent of its economy/industry/tech base.
Under option A - the active country may require centuries to get to the level where it was before the war. Also centuries to get to the same level relative to the other belligerent country.
Under option B - the active country may require just decades to get to the level where it was before the war. With also a chance to once again match the other belligerent country; perhaps not within those same decades but certainly within a much, much shorter timespan than the aforementioned "centuries".
Now, if the other belligerent country insists on fighting further, after the active country said "you win", and perhaps even, as it keeps fighting, it insists on some ludicrous "peace terms" where the active country would be punished even far more than WW1 Germany was,
then the active country still retains that option of "okay, you're being totally unreasonable and if you don't stop you do leave us no choice but to nuke you and thus die together". At that point, the other belligerent has much more to lose, relatively speaking, than in the option A) and will likely back down and accept more normal peace terms.
Case in point - Germany. After WW1 it was punished severely. Politically and economically. Yet it rose up in mere 20 years to capability levels which were enough to once again question the primacy in Europe. And Germany again after WW2. It lost once again, but within half a century, it lived to see the political barriers that separated it into two countries defeated and proliferated into the most powerful European economy.
Bottom line: global nuclear war leads to very certain centuries of destruction and harsh life. Conventional defeat gives a very realistic chance that things may change within decades. Because if anything is certain from history- it's that people forget. Administrations come and go. And within just a few decades old enemies can become some kind of partners, out of necessity if not out of anything else. And from that point, it's once again race to the top. Or to some next war.