The municipal puzzle : a review of the literature
Name
50655908-MIT.pdf
Description
Full printable version
Size
1.85 MB
Format
Adobe PDF
Checksum (MD5)
bc9afcd12f7887a9a0efedae5bde5bbd
Author(s)
Dwek, Julian, 1974-
Advisor(s)
John C. Cox.
Alternative Title
Municipal bond puzzle : a review of the literature
Date Issued
2002
Publisher
Massachusetts Institute of Technology
Abstract
Numerous papers have explored the pricing of municipal bonds relative to taxable instruments. An emerging theme of this literature is the persistently steep municipal term structure, and its incompatibility with prevailing notions of capital market equilibrium. This contradiction is known as the Municipal Puzzle. In this thesis, we critically assess the various theories advanced so far to explain the municipal puzzle. After considering the evidence, we identify the tax avoidance theory as being on balance the most likely candidate. The thesis then develops a helpful variation on the original tax avoidance view developed by Green. In addition, we propose a theoretical framework to overcome the apparent incompatibilities between the opportunity for tax avoidance and overall asset market equilibrium.
Description
Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management, 2002.
Includes bibliographical references (leaves 38-39).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
Terms of Use
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