Is debt reflected as a net economic positive in the GDP?


I have no formal background in economics, not even a college ot high school course, so my question may be simplistic. I am given to understand that bank assets include loans and the value of those loans is one factor in determine the asset holdings of banks. If this is correct, is debt reflected as a net economic positive in the GDP because the banks assets include debt, which is construed as income? By extension, what gets measured in GDP, income from the loan during that year (my payments) or the total value of the loan? Or is it both?


GDP is the $ value of the total value of final goods and services produced in a year. That is the income definition. There is an equivalent expenditure definition. Loans are financial assets and all financial assets and liabilities are not counted in the GDP --financial transactions don't produce anything real.

Last updated on
September 19, 2018

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