How responsive is the supply of tax-exempt bonds to state and local government borrowing costs? This question is critical to the effectiveness of current federal tax policies designed to stimulate investment in infrastructure and education. Would states borrow more if their cost of capital were...

Bond insurance was a small but sophisticated sector of the broader insurance industry. Conceived and created in the 1970s, bond insurance penetrated more than half of the entire US municipal bond market in the 1990s. This article explains bond insurance, its rise to prominence, and its sudden...

This study examines the yield spreads of 3,362 revenue bonds issued by 213 private colleges and universities in the United States. We find that the bond ratings of Moody's and S&P have the most important effect on the spreads and that higher ratings result in lower debt costs. Further, the...

We develop an intensity-based model of municipal yields, making simultaneous use of the CDS premiums of the insurers and both insured and uninsured municipal bond transactions. We estimate the model individually for 61 municipal issuers by exploiting the dramatic decline in credit quality of the...