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...

At the onset of the COVID-19 pandemic, state and local governments were among the sectors expected to experience the most severe distress. The combination of a sharply deteriorating revenue picture, a pressing need for additional expenditures, delays in the receipt of substantial taxes owed, and...

In November 2008, China announced a RMB4trn package of economic stimulus measures that also dealt with how it would be funded. As a result, in March 2009, the National People's Congress (China's parliament), with the approval of the central government, authorized the Ministry of Finance to issue...

I examine how liquidity risk affects municipal bond pricing. Liquidity has become a central concern to municipal bond investors, issuers, and regulators since the recent collapse of the monoline municipal bond insurers. The results show that liquidity risk had a minimal effect on yield spreads...

We investigate whether credit rating agencies (CRAs) and investors price the extent to which municipal bond ratings are explainable using public information. We use an ordinal logistic regression to estimate the expected and unexpected portions of bond ratings, and find that both CRA fees and...

We study the approximately 34% of local municipal bond issues that are unrated. Results show that issuers are less likely to obtain ratings for smaller issues, negotiated offerings, and bonds with high proxies for risk such as coming from areas with low property values and personal income. Using...

I estimate that the contemporary system of municipal bond ratings costs issuers over $2 billion annually. Fees paid to rating agencies directly account for about $500 million of this total. The greater burden on issuers arises from the relatively harsh ratings that agencies assign municipal...

This paper examines mean and volatility spillovers between four green municipal bonds issued by the US states of California, Colorado, Columbia and Ohio, and the role played by the recent Covid-19 pandemic and the COP policy announcements respectively. Specifically, four-variate VAR-GARCH-BEKK...

We analyze the impact of $38 billion of corporate subsidies given by U.S. local governments on their borrowing costs. We find that winning counties experience a 13.6 bps increase in bond yield spread as compared to the losing counties. The increase in yields is higher (16 -- 21 bps) when the...

Using a sample of Chinese municipal corporate bonds from 2011 to 2019, this paper investigates the effect of city-level air pollution on local government financing costs. We find that cities with severe air pollution tend to have higher municipal corporate bond spreads, indicating that air...