A Century of Municipal Bond Financing

We hand-collect new data on municipal bonds issued by all states and the largest 100 cities in the U.S. between 1920 and 2020 and study how the terms of municipal bond financing evolved over the last century. We document a striking decline of almost 50% in the maturity of these bonds. We analyze shocks to municipal financing needs generated by natural disasters and find that shorter maturity significantly impairs the local governments' ability to react to unexpected expenditure spikes. Critically, financing shortages during emergencies negatively impact the local economic activity