We start with a group of 51 “serial defaulters.” These are countries that have defaulted on their external debt at least twice since 1815 (or independence).<sup>41</sup> Appendix B5.4 shows that the results are similar when using a stricter definition of serial defaulters, that is, for countries with at least three or at least four defaults. The second group of 40 countries (“Others”) includes non-defaulters and one-time defaulters.<sup>42</sup> The default data are from Reinhart and Rogoff (2009), updated by Reinhart and Trebesch (2016) and here.

Table 5: Bond returns by country group and era

||Arithmetic<br>mean<br>(annual)|<br>Geometric<br>mean<br>(annual)|SD|Excess return<br>(mean, above<br>UK/US bonds)|
|---|---|---|---|---|
|Total Sample (1815-2016)|||||
|Serial defaulters<br>|7.1<br>|5.8<br>|16.8<br>|4.6<br>|
|Other countries with ext. bonds|5.6|5.1|10.4|3.4|
|UK/US government bonds|2.9|2.5|9.3||
|Early 19th Century (1815-1869)|||||
|Serial defaulters<br>|7.0<br>|5.5<br>|17.8<br>|2.9<br>|
|Other countries with ext. bonds|5.8|5.4|10.1|1.8|
|UK government bonds|5.1|4.6|10.2||
|Pre-WW1 (1870-1913)|||||
|Serial defaulters|6.6|6.2|9.4|4.1|
|Other countries with ext. bonds<br>|5.3<br>|5.2<br>|4.0<br>|2.6|
|UK government bonds|2.5|2.5|3.9||
|Interwar (1920-1937)|||||
|Serial defaulters<br>|6.8|4.8|21.2|-2.8|
|Other countries with ext. bonds|10.5|9.4|16.5|1.0|
|US government bonds|6.5|5.9|11.5||
|Today (1995-2016)|||||
|Serial defaulters<br>|9.9|9.0|14.5|6.3|
|Other countries with ext. bonds|7.4|7.1|9.3|4.9|
|US government bonds|4.0|3.7|8.2||

_Notes:_ This table shows summary statistics of yearly total real returns on foreign-currency sovereign bonds across 200 years for different country groups. Serial defaulters had two or more external defaults or were in default for a very long time (their share of years in default since independence is above the sample median of 20%). Other countries are those that never defaulted or only for a brief period (share of years in default below the median). Excess returns above UK/US bonds are computed at the bond level.

Table 5 shows summary statistics for the three groups, (i) serial defaulters, (ii) “other” sovereigns that issued debt in USD and GBP abroad, and (iii) “risk-free” US or UK long-term government bonds. The

> 41 Specifically, the group includes Argentina, Austria/Austria-Hungary, Belize, Bolivia, Brazil, Bulgaria, Chile, China, Colombia, Costa Rica, Cote d'Ivoire, Cuba, Czech Republic/Czechoslovakia, Dominican Republic, Ecuador, Egypt, El Salvador, Gabon, Germany, Ghana, Greece, Guatemala, Haiti, Honduras, Hungary, Indonesia, Jamaica, Kazakhstan, Mexico, Morocco, Nicaragua, Nigeria, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Russia, Senegal, Serbia/ Yugoslavia, South Africa, Spain, Sri Lanka, Turkey/Ottoman Empire, Ukraine, Uruguay, Venezuela, and Zimbabwe.

> 42 Algeria, Angola, Armenia, Australia, Azerbaijan, Belarus, Belgium, Cameroon, Canada, Croatia, Denmark, Estonia, Ethiopia, Finland, France, Georgia, Iraq, Ireland, Italy, Japan, Jordan, Kenya, Latvia, Lebanon, Lithuania, Malaysia, Mongolia, Namibia, Netherlands, New Zealand, Norway, Slovak Republic, South Korea, Sweden, Switzerland, Tanzania, Thailand, Trinidad and Tobago, Vietnam, Zambia.

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