- Internal debt
Internal debt is the part of a
country's debts that is owed to creditors who are citizens of that country.
It is a form of fiat creation of
money, in which the government obtains cash not by printing it, but by borrowing it. The money created is in the form of treasury securitiesor securitiesborrowed from the central bank. These may be traded but will only rarely be spent on goods and services. In this way, the expected increase in inflationdue to the increase in national wealthis lower than if the government had simply printed the money and increased the more liquid forms of wealth (i.e., the money supply).
The internal debt forms a part of the
national debtof the country. Its complement is external debt.
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Look at other dictionaries:
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