Government Bond

(noun)

A government bond is a bond issued by a national government. Such bonds are often denominated in the country's domestic currency.

Related Terms

Examples of Government Bond in the following topics:

  • The Public Debt

    • Governments usually borrow by issuing securities, government bonds and bills.
    • A government bond is a bond issued by a national government.
    • However, central banks may buy government bonds in order to finance government spending, thereby monetizing the debt.
    • Bonds issued by national governments in foreign currencies are normally referred to as sovereign bonds.
    • An advantage of issuing bonds in a currency such as the US dollar, the pound sterling, or the euro is that many investors wish to invest in such bonds.

  • Fiscal Policy

    • A fiscal deficit is often funded by issuing bonds.
    • When the government runs a budget deficit, funds will need to come from public borrowing (government bonds), overseas borrowing, or monetizing the debt.
    • When governments fund a deficit with the issuing of government bonds, interest rates can increase across the market, because government borrowing creates higher demand for credit in the financial markets.
    • This is because, all other things being equal, the bonds issued from a country executing expansionary fiscal policy now offer a higher rate of return.
    • To purchase bonds originating from a certain country, foreign investors must obtain that country's currency.

  • Income Security Policy

    • Fiscal policy is considered to be any change the government makes to the national budget in order to influence a nation's economy.
    • Governments issue government bonds in their own currency and sovereign bonds in foreign currencies.
    • Local governments issue municipal bonds to finance themselves.
    • Debt issued by government-backed agencies is called an agency bond.
    • Another contributor to changing the role of government in the 1930s was President Franklin Delano Roosevelt.

  • Deficit Spending, the Public Debt, and Policy Making

    • Government debt is the debt owed by a central government.
    • In the United States and other federal states, government debt may also refer to the debt of a state or provincial government, municipal or local government.
    • Governments usually borrow by issuing securities, government bonds, and bills.
    • Governments usually issue bonds to match their deficits.
    • Bonds can be bought by the Central Bank through quantitative easing.

  • Fiscal Policy and Policy Making

    • The two main instruments of fiscal policy are government taxation and expenditure.
    • Contractionary fiscal policy, which occurs when government spending is lower than tax revenue, and is usually undertaken to pay down government debt .
    • Therefore, for purposes of the above definitions, "government spending" and "tax revenue" are normally replaced by "cyclically adjusted government spending" and "cyclically adjusted tax revenue".
    • Borrowing: A fiscal deficit is often funded by issuing bonds, like treasury bills or consols and gilt-edged securities.
    • Public debt or borrowing : it refers to the government borrowing from the public.

  • The International Monetary Structure

    • The international monetary structure involves international institutions, regional trading blocs, private players, and national governments.
    • Also important to the international monetary structure are private participants, such as players active in the markets of stocks, bonds, foreign exchange, derivatives, and commodities, as well as investment banking.
    • Governments are also a part of the international monetary structure, primarily through their finance ministries: they pass the laws and regulations for financial markets, and set the tax burden for private players such as banks, funds, and exchanges.
    • They are closely tied to central banks that issue government debt, set interest rates and deposit requirements, and intervene in the foreign exchange market.
    • The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.

  • The Powers of Local Government

    • Powers of local governments are defined by state rather than federal law, and states have adopted a variety of systems of local government.
    • The US Census Bureau conducts the Census of Governments every five years to compile statistics on government organization, public employment, and government finances.
    • The categories of local government established in this Census of Governments is a convenient basis for understanding local government: county governments, town or township governments, municipal governments and special-purpose local governments.
    • County governments are organized local governments authorized in state constitutions and statutes.
    • Town or township governments are organized local governments authorized in the state constitutions and statutes of states, established to provide general government for a defined area, generally based on the geographic subdivision of a county.

  • Governmental Interest Groups

    • Government interest groups are a unique type of interest group that represents the interests of government to other governments.
    • Government interest groups are a unique form of interest groups that represent the interests of government to other governments.
    • Since then local governments have continued their efforts.
    • FERA was part of the New Deal federal funding to state and local governments.
    • Give examples of government interest groups and their influence on policy

  • Government Corporations

    • Government corporations are revenue generating enterprises that are legally distinct from but operated by the federal government.
    • A government-owned corporation, also known as a state-owned company, state enterprise, publicly owned corporation, or commercial government agency, is a legal entity created by a government to undertake commercial activities on behalf of the government.
    • In some cases, government-owned corporations are considered part of the government, and are directly controlled by it.
    • Lastly, the government sometimes controls government acquired corporations--corporations that were not chartered or created by the government, but which it comes to possess and operate.
    • Differentiate between a government-owned corporation, a government-sponsored enterprise, and organizations chartered by the government that provide public services

  • Devolution

    • Devolution is the statutory granting of powers from central government to government at a regional, local, or state level.
    • Devolution is the statutory granting of powers from central government to government at a regional, local, or state level.
    • In the United States, local governments are subdivisions of states, while the federal government, state governments and federally recognized American Indian tribal nations are recognized by the United States Constitution.
    • Theoretically, a state could abolish all local governments within its borders.
    • The governor of some states may also have power over local government affairs.