We develop a model of Ponzi schemes with asymmetric information to study Ponzi frauds. A long-lived agent offers to save on behalf of short-lived agents at a higher rate than they can earn themselves. The long-lived agent may genuinely have a superior savings technology, but may be an imposter...

This paper examines the effect of growth-enhancing policies in an R&D-based endogenous growth model when the government does not have the ability to raise taxes to finance the required expenses. We show that the government can increase the economic growth rate by debt-financed R&D subsidies...