The current system of tax-exempt bond financing is inefficient and inequitable because a large portion of the federal subsidy provided by the tax exemption does not reach state and local governments and accrues instead to the wealthiest investors. In addition, the current system excludes large...

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...

This paper documents that nearly all tax-exempt (municipal) bonds with maturity greater than ten years are callable and call protection ends in ten years. The frequent use of callable debt financing by high grade tax exempt issuers, most of the municipal bonds in the sample are AAA or AA rated,...

This paper documents that nearly all tax-exempt (municipal) bonds with maturity greater than ten years are callable and call protection ends in ten years. The frequent use of callable debt financing by high grade tax exempt issuers, most of the municipal bonds in the sample are AAA or AA rated,...