Publication:
Municipal Bond Markets

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Municipal Bond Markets.pdf (1.41 MB)
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2019-12
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Anual Reviews
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https://hdl.handle.net/20.500.14417/3756
DOI
https://doi.org/10.1146/annurev-financial-110118-123034
Abstract
The effective functioning of the municipal bond market is crucial for the provision of public services, as it is the largest capital market for state and municipal issuers. Prior research has documented tax, credit, liquidity, and segmentation effects in municipal bonds. Recent regulatory initiatives to improve transparency have made granular trade data available to researchers, rendering the municipal bond market a natural laboratory for the study of financial intermediation, asset pricing in decentralized markets, and local public finance. Trade-by-trade studies have found large trading costs, contemporaneous price dispersion, and other deviations from the law of one price. More research is required to understand optimal market design and the impact of post-crisis regulation, sustainability, and financial technology
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Attribution-NonCommercial-NoDerivatives 4.0 International
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IE Business School
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Cestau, D., Hollifield, B., Li, D., & Schürhoff, N. (2019). Municipal bond markets. Annual Review of Financial Economics, 11(1), 65-84. https://doi.org/10.1146/annurev-financial-110118-123034.
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