The above is their Figure 1, which shows the fraction of countries that were either in default or working through a debt restructuring. The important point, and indeed the central point of their paper, is that waves of sovereign debt default have always been a feature of industrial capitalism (and indeed, as their earlier European data makes clear, pre-industrial capitalism too). So in this context, present events are not that unprecedented:
As we shall see when we tabulate individual country experiences in Section IV,That said, it seems, at a minimum, plausible, that we about to live through another wave of sovereign defaults like the ones above. Overall, the world has taken on too much debt. In effect, in the last couple of decades, we have been irrationally optimistic about future growth prospects, and, one way or another, some of this debt is going to have to be written off, or at least rescheduled at below market rates.
serial default on external debt—that is, repeated sovereign default—is the norm
throughout every region in the world, even including Asia and Europe.
Obviously, none of these past episodes was fatal to industrial civilization taken as a whole. Equally clearly, all of them were very unpleasant and risky to live through as individuals and as families. I grew up on my grandparent's stories of the depression and WWII, and one branch of my family lost most of its money in that wave back in the 1870s.
This next graph is based on Reinhart and Rogoff's table 7, and shows both the number of individual default events from 1800 or independence, as well as the fraction of time in default or restructuring, for the European countries in their sample.
Greece, Portugal, or Spain defaulting on their debts are not exactly unprecedented events...