Credit rating agencies implemented a "dual ratings system" under which US municipal bond issuers are assessed more harshly that other types of issuers. This system created an artificial demand for bond insurance because the so-called monoline bond insurers were rated more leniently than the...

I estimate that the contemporary system of municipal bond ratings costs issuers over $2 billion annually. Fees paid to rating agencies directly account for about $500 million of this total. The greater burden on issuers arises from the relatively harsh ratings that agencies assign municipal...

After achieving peak revenue of $1.5 billion in 2007, the municipal bond insurance business collapsed in the wake of the financial crisis. More recently, the industry has started to recover, with three market participants seeking to write new policies. Our study asks whether municipal bond...

Puerto Rico s heavy public-sector debt burden is the unintended consequence of a series of policy decisions extending back to the US takeover of the island in 1898. Rather than placing Puerto Rico on a path to statehood, Congress imposed a series of unique governing structures on the island....

La deuda excesiva que enfrenta el sector público de Puerto Rico es el resultado involuntario de una serie de decisiones de política pública hechas a partir del 1898 cuando los Estados Unidos tomó posesión de la isla. En lugar de encaminar a Puerto Rico hacia la estadidad, el Congreso de los...

In recent decades, the Food and Drug Administration (FDA) has assumed increasing premarket authority for drugs and devices. Given how the FDA s regulatory stance has inhibited breakthroughs in the development of medical products, it appears that the agency will stand in the way of emerging...

After remaining relatively stable between 2004 and 2010, Medicaid spending as a proportion of overall state expenditure has been rising in the current decade. This trend may be expected to continue in the states participating in Medicaid expansion as the federal share of spending on newly...

The high and rising cost of US medical care is partially attributable to legally enforced rigidities in the health care system. By relaxing restrictions, the government can unlock competitive forces that drive prices down and empower individuals to avoid unnecessary, expensive medical services....

In response to a request from the California Debt and Investment Advisory Commission, we propose a model to estimate default probabilities for bonds issued by cities. The model can be used with financial data available in Comprehensive Annual Financial Reports that cities are required to...

Ten years after the Securities and Exchange Commission mandated the conversion of corporate financial statements to machine-readable formats, there is still no analogous mandate for state and local government Comprehensive Annual Financial Reports (CAFRs). We explore the challenges and benefits...