[lbo-talk] Debt write offs and GDP

Doug Henwood dhenwood at panix.com
Fri Oct 31 08:30:54 PST 2003


cian wrote:


>Does anyone one know how debt write offs affect GDP?

They don't. GDP covers only current production, and incomes generated by current production. "Finance" doesn't enter the picture at all, which is why the Fed publishes a separate set of flow of funds accounts.

If debt writeoffs somehow stimulate or depress current spending, they can indirectly enter the GDP accounts. But only that way.

Doug



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