Problem with calibration on debt

General DSGE Modeling
1

Dear Professor Pfeifer,

In BGG(1999), they use balance sheet to model the structure of firms and its right side is made up of debt and net worth. But I don’t know if I should use gross liabilities data to calibrate the parameters related or using bank loans data also make sense. Would you please give any advice?

Thank you for your time.

2

It always depends on the context and what you are trying to model/achieve. If you are trying to model the firm sector as whole, then gross debt will typically overstate the amount of leverage.