If a government decides to recapitalize banks then will that come under government expenditure and show up in GDP or will it be a transfer payment and stay outside the GDP? and why? In short, Is the capital infusion done in the banks by the federal government falls under transfer payments or govt expenditure? and why would it be so?

Thank you!

  • 1
    $\begingroup$ I think this question should be rephrased. You assert that it is either an expenditure or a transfer payment, but I think neither category applies. “Recapitalizing banks” is vaguely defined, but it usually would be a financial transaction. $\endgroup$ – Brian Romanchuk Sep 4 '19 at 23:31
  • $\begingroup$ Thanks a lot Brain. $\endgroup$ – Varun Singh Sep 5 '19 at 18:41

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