In 2010, the Municipal Securities Rulemaking Board (MSRB) proposed Rule Change SR-MSRB-2010-03 (the Rule Change), which requires a display of municipal bond credit ratings on the EMMA website, a centralized repository of municipal bond information. This Rule Change modestly improved retail...

Municipal bonds exhibit considerable retail pricing variation, even for same-size trades of the same bond on the same day, and even from the same dealer. Markups vary widely across dealers. Trading strongly clusters on eighth price increments, and clustered trades exhibit higher markups. Yields...

Local governments often seek credit ratings from multiple agencies for external financing. Rating shopping and catering, the incentives of the rating agencies, and the career incentives of the analysts issuing the ratings may render the ratings interdependent. This paper estimates the feedback...

In March 2020, the COVID-19 pandemic caused severe financial stress for state and local municipalities. Municipalities' public health responses led to material increases in expenditures. At the same time, many municipalities faced revenue delays and declines due to extended tax deadlines and...

We examine how interstate differences in fiscal rules can help explain the differences in municipal bond returns across US states in a dynamic equilibrium model of municipal credit risk. State governments choose the optimal level of debt and a default policy, taking as given a fiscal rule for...