Novy-Marx, Robert; Rauh, Joshua D. - In: American Economic Journal: Economic Policy 4 (2012) 2, pp. 182-213
During the last quarter of 2008, financial losses in state pension funds varied from 12 percent to 68 percent of the revenue generated by the state government. We quantify a sovereign default channel in the state municipal market by examining how changes in bond spreads vary with state pension...