Abstract
Public debt (government debt) is a legal obligation on the part of a government to make interest and/or amortization payments to holders of designated claims in accordance with a defined temporal schedule. Public debt is created through government borrowing from individuals, corporations, institutions, and other governments. Borrowing is part of a bilateral exchange process in which lenders transfer funds to government and government, in turn, transfers to lenders designated instruments that represent claims on government revenues over a series of periods subsequent to that in which the borrowing occurs. In simple balance-sheet terms, public debt is a liability item on the government’s account, and as asset on the combined accounts of the holders of the debt instruments.
This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman
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Buchanan, J.M. (1987). Public Debt. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1883-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_1883-1
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Publisher Name: Palgrave Macmillan, London
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Public Debt- Published:
- 17 March 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_1883-2
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Public Debt- Published:
- 26 November 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_1883-1