Loan can grow the economy, which actually works positively by - TopicsExpress

Loan can grow the economy, which actually works positively by investing on production. However, loan for investment on existing assets such as mortgage will grow the bubbles of economy which is expected to explode in the future. It also increase the ratio of debt to income for individuals, which results in paying more to bank than purchasing power. Thus this scenario is the reason of economic bubble, debt crisis, economic downturn which we have been already experiencing. The remedy or preventive measure can be made by investment on productive sector causing employment and income, regulating sepculative credit, etc.

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