Climate change is increasing the frequency of natural disasters, which could make municipal bonds a riskier asset class. We study the effects of natural disasters on municipal bond returns, exploiting the repeat sales approach to overcome the challenge that municipal bonds trade extremely...

Climate change is increasing the frequency of extreme weather events and natural disasters, which could in turn make municipal bonds---a $4 trillion market in the US---a fundamentally riskier asset class. We study the effect of natural disasters on municipal bond returns and volatilities,...