Local Governments Debt
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Debt is a liability in which a creditor has a claim on the debtor.
Debt instrument is a financial claim that requires payment(s) of interest and/or principal by the debtor to the creditor at a date, or dates, in the future.
Total gross debt (“total debt” or “total debt liabilities”) consists of all liabilities that are debt instruments.
Net debt is calculated as gross debt minus financial assets corresponding to debt instruments.
Domestic debts are debt liabilities owed by residents to residents of same economy.
External debts are debt liabilities owed by residents to nonresidents.
Interest is the cost (expense) that the debtor incurs for the use of the principal outstanding.
“Golden rule” of balanced budget prescribes that local authorities should never take on debt to cover current expenditure; it allows, or even...
KeywordsLocal Government Public Debt Golden Rule Capital Budget Fiscal Federalism
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