The impact of bank financing on municipalities' bond issuance and the real economy☆

• 成果类型: Article
• 署名作者: Dagostino, Ramona
• 署名单位: University of Virginia
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2025.104022
• 发表日期: 2025
• 关键词: Municipal bonds; Tax policy; EMPLOYMENT; recession; Bank financing; Crowding out; multiplier

摘要

Do federal tax incentives for banks investing in municipal bonds support local governments during recessions? This paper exploits a change in tax benefits for banks purchasing municipal bonds and finds that expanding access to bank financing during recessions increases local governments' debt issuance and employment growth. The estimated job multiplier is 22 jobs per million dollars of spending. There is moderate evidence of mortgage loans being crowded out by banks' increased holdings of municipal bonds.