Government borrowing as a Ponzi scheme: the case of Bangladesh




This study investigates whether government borrowing can be likened to a Ponzi scheme which will allow the government to roll-over its debt perpetually. The results show that, on the basis of the condition of maintaining real economic growth rate above and beyond the real interest rate on government debt, it will not be possible to sustain a perpetual Ponzi scheme of all four types of National Savings Certificates in Bangladesh. The government’s debt may be rolled over perpetually for two types of National Savings Certificates, following the condition outlined in Ball, et al. (1998), or for three types of National Savings Certificates following the condition outlined in Mehrotra (2017). 

Author Biography

Syed Yusuf Saadat, Centre for Policy Dialogue (CPD)

Syed Yusuf Saadat is an economist currently working at the Centre for Policy Dialogue (CPD), a civil society think tank which promotes inclusive policymaking in Bangladesh. Yusuf’s expertise is in assessing economic indicators and policies, analysing data, writing, and teaching. He has extensive knowledge of economic theory, combined with command over econometric methods used for estimating models. Yusuf is an award-winning researcher who has undertaken research for organisations such as Friedrich-Ebert-Stiftung, UK Aid, UNESCAP and UNDP, and published articles in peer-reviewed international journals. His research interests include income, wealth, and gender inequality, as well as labour economics, financial economics, international economics and climate change. Yusuf is also a British Council trained teacher with professional experience in teaching A Level Economics and O Level English Language.


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How to Cite

Saadat, S. Y. (2021). Government borrowing as a Ponzi scheme: the case of Bangladesh. Economics and Business Letters, 10(1), 81–86.