IB STUDY

The role of international debt

 

Foreign debt: the amount of money owed by one country to foreign lenders, including international financial institutions, governments and commerical banks. 

 

Developing countries often find themselves in debt because they are unable to fund their expenditures. In general, governments have three ways to pay for their expenditures: tax revenues, borrowing or printing money (quantitative easing). Although quantitative easing appears to have been sucessful for both the USA and the UK economies following the 2008 financial crisis, printing money would probably not be suitable for developing countries. This is because as the supply of money increases, mor

 

2008 Zimbawe printed money 

1946 Hungary