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...

One important channel by which market-augmenting government affects economic growth is through its effect on market-mobilized capital the level of capital mobilized by market mechanisms. Market-augmenting government, which is measured in part by both statutory law and law enforcement, affects...