Publications
Publications
- 2011
- HBS Working Paper Series
Why Fears about Municipal Credit Are Overblown
Abstract
Highly publicized predictions of 50-100 municipal defaults have caused anxiety among municipal bond investors. While there is some chance that negative investor sentiment will lead to further spread widening, the probability of the kind of widespread default that would be required to justify current municipal bond yields is low. In this paper we document the reasons why the fears of widespread municipal default during the current recession are overblown.
Keywords
Citation
Bergstresser, Daniel, and Randolph Cohen. "Why Fears about Municipal Credit Are Overblown." Harvard Business School Working Paper, No. 11-129, June 2011.