Problem with calibration on debt

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.

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.