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Abstract: 

This paper examines the role John Petersen played in creating a foundation for today’s municipal market and helping us to understand the impacts of various policies on the workings of the market. This role was especially important during the critical period of the presidency of Ronald Reagan, when fundamental changes in the relationship between the federal government and municipal finance were shaped and debated. The outcome of these debates, especially around the Tax Reform Act of 1986, was fundamental to the basis upon which capital finance is framed by states and local governments in the 21st century. An interview with Frank Shafroth, an expert in municipal finance and a long-time advocate for states and cities in Washington, DC, helps us understand Petersen’s leadership role in municipal finance and his career-long effort to improve the efficiency of the municipal bond market.

Keywords: Municipal market, federal government and municipal finance, tax reform, capital finance, municipal bond market efficiency

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