"Unprecedented" and "historic" seem to crop up everywhere in the media. But is this really the case? This study shows the opposite. "We find that serial default is a nearly universal phenomenon as countries transform themselves from emerging markets to advanced economies. Major default episodes are typically spaced some years (or decades) apart, creating an illusion that "this time is different". A recent example of this is the false belief that domestic debt is a novel feature of the modern financial landscape. We also confirm that crises frequently emanate from financial centres with transmission through interest rate shocks and commodity price collapses. Thus, the recent US sub-prime financial crisis is hardly unique."

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